Docstoc

canada tax

Document Sample
canada tax Powered By Docstoc
					Dayarayan Management & Consulting Services LTD

Canada tax guide 2010




Welcome to the City of Vancouver
Bordered by the Coast Mountain Range and the Pacific Ocean, Vancouver is
recognized as one of the world's most livable cities. Archaeological evidence
shows that the Coast Salish people had settled the Vancouver area by 500 BC.
The City of Vancouver is renowned for its innovative programs in the areas of
sustainability, accessibility and inclusivity. In 2010, Vancouver will host the
world at the 2010 Olympic and Paralympics Winter Games.




                                        1
Facts about Vancouver
Population/ Climate
Vancouver is the eighth largest city in Canada with a population of 578,000
(2006 census) and has one of the mildest climates in Canada with temperatures
averaging around 3 degrees Celsius in January and 18 degrees Celsius in July. It
covers 114.7 sq km (44.3 sq miles), and is part of Metro Vancouver, the third
largest metropolitan area in Canada, with a population of 2.1 million (2006
census).
 Business/ Economy
Vancouver has Canada's largest and most diversified port, trading $75 billion in
goods annually. It is home to a variety of different industries, including the
mining, forest, biotech, film and software industries.
History
Archaeological evidence shows that the Coast Salish people had settled the
Vancouver area by 500 BC. In the 1870s, Vancouver was founded as a sawmill
settlement called Granville. And in 1886, the city was incorporated and renamed
Vancouver after Captain George Vancouver, a British naval captain who
explored the area in 1792.
 Source: http://vancouver.ca/aboutvan.htm


Canada Tax Guide
Personal income taxes
Canada levies personal income tax on the worldwide income of individuals'
resident in Canada and on certain types of Canadian-source income earned by
non-resident individuals.
After the calendar year, Canadian residents file a T1 Tax and Benefit Return for
individuals. It is due April 30, or June 15 for self-employed individuals and
their spouses, or common-law partners. It is important to note, however, that

                                       2
any balance owing is due on or before April 30. Outstanding balances remitted
after April 30 may be subject to interest charges; regardless of whether the
taxpayer's filing due date is April 30 or June 15.
The amount of income tax that an individual must pay is based on the amount of
their taxable income (income earned less allowed expenses) for the tax year.
Personal income tax may be collected through various means:
    1. Deduction at source - where income tax is deducted directly from an
       individual's pay and sent to the CRA.
    2. Instalment payments - where an individual must pay his or her estimated
       taxes during the year instead of waiting to settle up at the end of the year.
    3. payment on filing - payments made with the income tax return
    4. arrears payments - payments made after the return is filed
Employers may also deduct Canada Pension Plan/Quebec Pension Plan
(CPP/QPP) contributions, Employment Insurance (EI) and Provincial Parental
Insurance (PPIP) premiums from their employees' gross pay. Employers then
send these deductions to the taxing authority.
Individuals who have overpaid taxes or had excess tax deducted at source will
receive a refund from the CRA upon filing their annual tax return.
Generally, personal income tax returns for a particular year must be filed with
CRA on or before April 30 of the following year.

Basic calculation
An individual taxpayer must report his or her total income for the year. Certain
deductions are allowed in determining net income, such as deductions for
contributions to Registered Retirement Savings Plans, union and professional
dues, child care expenses, and business investment losses. Net income is used
for determining several income-tested social benefits provided by the federal
and provincial/territorial governments. Further deductions are allowed in
determining taxable income, such as capital losses, half of capital gains
included in income, and a special deduction for residents of northern Canada.
Deductions permit certain amounts to be excluded from taxation altogether.
Tax payable before credits is determined using four tax brackets and tax rates.
Non-refundable tax credits are then deducted from tax payable before credits for
various items such as a basic personal amount, dependents, Canada/Quebec
Pension Plan contributions, Employment Insurance premiums, disabilities,
tuition and education and medical expenses. These credits are calculated by
multiplying the credit amount (e.g., the basic personal amount of $10,100 in
2009) by the lowest tax rate. This mechanism is designed to provide equal
benefit to taxpayers regardless of the rate at which they pay tax.
A non-refundable tax credit for charitable donations is calculated at the lowest
tax rate for the first $200 in a year, and at the highest tax rate for the portion in
excess of $200. This tax credit is designed to encourage more generous
charitable giving.
                                          3
Certain other tax credits are provided to recognize tax already paid so that the
income is not taxed twice:
    The dividend tax credit provides recognition of tax paid at the corporate
      level on income distributed from a Canadian corporation to individual
      shareholders; and
    The foreign tax credit recognizes tax paid to a foreign government on
      income earned in a foreign country.




Provincial and territorial personal income taxes

Provinces and territories that have entered into tax collection agreements with
the federal government for collection of personal income taxes ("agreeing
provinces", i.e., all provinces and territories except Quebec) must use the
federal definition of "taxable income" as the basis for their taxation. This means
that they are not allowed to provide or ignore federal deductions in calculating
the income on which provincial tax is based.
Provincial and territorial governments provide both non-refundable tax credits
and refundable tax credits to taxpayers for certain expenses. They may also
apply surtaxes and offer low-income tax reductions.
Canada Revenue Agency collects personal income taxes for agreeing
provinces/territories and remits the revenues to the respective governments. The
provincial/territorial tax forms are distributed with the federal tax forms and the
taxpayer need make only one payment -- to CRA -- for both types of tax.
Similarly, if a taxpayer is to receive a refund, he or she receives one cheque or
bank transfer for the combined federal and provincial/territorial tax refund.
Information on provincial rates can be found on the Canada Revenue Agency's
site.

Quebec
Quebec administers its own personal income tax system, and therefore is free to
determine its own definition of taxable income. To maintain simplicity for
taxpayers, however, Quebec parallels many aspects of and uses many
definitions found in the federal tax system.

Personal federal marginal tax rates

The following historical federal marginal tax rates of the Government of Canada
come from the website of the Canada Revenue Agency. They do not include
applicable provincial income taxes. Data on marginal tax rates from 1998 to
                                         4
  2006 are publicly available.[3] Data on basic personal amounts (personal
  exemption taxed at 0%) can be found on a year by year basis is also available.[4]
  Their values are contained on line 300 of either the document "Schedule 1 -
  Federal Tax", or "General Income Tax and Benefit Guide", of each year by year
  General Income Tax and Benefit Package listed.

           Canadian federal marginal tax rates of taxable income
       $0 - $10,382 $10,382 - $40,970 $40,970 - $81,941 $81,941 $127,021     over $127,021
2010
           0%             %15               %22                %22                 %29
2009 $0 - $10,320 $10,321 - $40,726 $40,727 - $81,452 $81,453 - $126,264     over $126,264
           0%             15%               22%                26%                 29%
       $0 - $9,600   $9,601 - $37,885 $37,886 - $75,769 $75,770 - $123,184   over $123,184
2008
           0%             15%               22%                26%            29%
       $0 - $9,600   $9,600 - $37,178 $37,178 - $74,357 $74,357 - $120,887   over $120,887
2007
           0%             15%               22%                26%            29%
       $0 - $8,839   $8,839 - $36,378 $36,378 - $72,756 $72,756 - $118,285   over $118,285
2006
           0%            15.25%             22%                26%            29%
       $0 - $8,648   $8,648 - $35,595 $35,595 - $71,190 $71,190 - $115,739   over $115,739
2005
           0%             15%               22%                26%            29%
       $0 - $8,012   $8,012 - $35,000 $35,000 - $70,000 $70,000 - $113,804   over $113,804
2004
           0%             16%               22%                26%                 29%
       $0 - $7,756   $7,756 - $32,183 $32,183 - $64,368 $64,368 - $104,648   over $104,648
2003
           0%             16%               22%                26%            29%
       $0 - $7,634   $7,634 - $31,677 $31,677 - $63,354 $63,354 - $103,000   over $103,000
2002
           0%             16%               22%                26%                 29%
       $0 - $7,412   $7,412 - $30,754 $30,754 - $61,509 $61,509 - $100,000   over $100,000
2001
           0%             16%               22%                26%                 29%
       $0 - $7,231   $7,231 - $30,004 $30,004 - $60,009                 over $60,009
2000
           0%             17%               25%                              29%
       $0 - $6,794   $6,794 - $29,590 $29,590 - $59,180                 over $59,180
1999
           0%             17%               26%                              29%
       $0 - $6,794   $6,794 - $29,590 $29,590 - $59,180                 over $59,180
1998
           0%             17%               26%                              29%




                                             5
Income not taxed

The following types of income are not taxed in Canada (this list is not
exhaustive):
    gifts and inheritances;
    lottery winnings;
    winnings from betting or gambling for simple recreation or enjoyment;
    strike pay;
    compensation paid by a province or territory to a victim of a criminal act
      or a motor vehicle accident*;
    certain civil and military service pensions;
    income from certain international organizations of which Canada is a
      member, such as the United Nations and its agencies;
    war disability pensions;
    RCMP pensions or compensation paid in respect of injury, disability, or
      death;
    income of First Nations, if situated on a reserve;
    capital gain on the sale of a taxpayer‘s principal residence;
    provincial child tax credits or benefits and Québec family allowances;
    Working income tax benefit;
    the Goods and Services Tax or Harmonized Sales Tax credit (GST/HST
      credit) or Quebec Sales Tax credit; and
    The Canada Child Tax Benefit.


Note that the method by which these forms of income are not taxed can vary
significantly, which may have tax and other implications; some forms of income
are not declared, while others are declared and then immediately deducted in
full. In certain cases, the deduction may require off-setting income, while in
other cases; the deduction may be used without corresponding income. Income
which is declared and then deducted, for example, may create room for future
Registered Retirement Savings Plan deductions. But then the RRSP contribution
room may be reduced with a pension adjustment if you are part of another plan,
reducing the ability to use RRSP contributions as a deduction.
Deductions which are not directly linked to non-taxable income exist, which
reduce overall taxable income. A key example is Registered Retirement Savings
Plan (RRSP) contributions, which is a form of tax-deferred savings account
(income tax is paid only at withdrawal, and no interim tax is payable on account
earnings).
*Quebec has changed its rules in 2004 and, legally, this may be taxed or may
not – Courts have yet to rule.



                                       6
Corporate income taxes

Corporate taxes include taxes on corporate income in Canada and other taxes
and levies paid by corporations to the various levels of government in Canada.
These include capital and insurance premium taxes; payroll levies (e.g.,
employment insurance, Canada Pension Plan, Quebec Pension Plan and
Workers' Compensation); property taxes; and indirect taxes, such as goods and
services tax (GST), and sales and excise taxes, levied on business inputs.
Corporations are subject to tax in Canada on their worldwide income if they are
resident in Canada for Canadian tax purposes. Corporations not resident in
Canada are subject to Canadian tax on certain types of Canadian source income
(Section 115 of the Canadian Income Tax Act).
The taxes payable by a Canadian resident corporation may be impacted by the
type of Corporation that it is:

      A Canadian-controlled private corporation, which is defined as a
       corporation that is:
           resident in Canada and either incorporated in Canada or resident in
             Canada from June 18, 1971, to the end of the taxation year;
           not controlled directly or indirectly by one or more non-resident
             persons;
           not controlled directly or indirectly by one or more public
             corporations (other than a prescribed venture capital corporation, as
             defined in Regulation 6700);
           not controlled by a Canadian resident corporation that lists its
             shares on a prescribed stock exchange outside of Canada;
           not controlled directly or indirectly by any combination of persons
             described in the three preceding conditions; if all of its shares that
             are owned by a non-resident person, by a public corporation (other
             than a prescribed venture capital corporation), or by a corporation
             with a class of shares listed on a prescribed stock exchange, were
             owned by one person, that person would not own sufficient shares
             to control the corporation; and
           No class of its shares of capital stock is listed on a prescribed stock
             exchange.
      A private corporation, which is defined as a corporation that is:
           resident in Canada;
           not a public corporation;
           not controlled by one or more public corporations (other than a
             prescribed venture capital corporation, as defined in Regulation
             6700);


                                         7
             not controlled by one or more prescribed federal Crown
              corporations (as defined in Regulation 7100); and
           Not controlled by any combination of corporations described in the
              two preceding conditions.
     A public corporation, defined as a corporation that is resident in Canada
       and meets either of the following requirements at the end of the taxation
       year:
           it has a class of shares listed on a prescribed Canadian stock
              exchange; or
           It has elected, or the Minister of National Revenue has designated
              it, to be a public corporation and the corporation has complied with
              prescribed conditions under Regulation 4800(1) on the number of
              its shareholders, the dispersing of the ownership of its shares, the
              public trading of its shares, and the size of the corporation.
If a public corporation has complied with certain prescribed conditions under
Regulation 4800(2), it can elect, or the Minister of National Revenue can
designate it, not to be a public corporation. Other types of Canadian resident
corporations include Canadian subsidiaries of public corporations (which do not
qualify as public corporations), general insurers and Crown corporations.

Provincial/territorial corporate income taxes
Corporate income taxes are collected by the CRA for all provinces and
territories except Ontario, Quebec and Alberta. Provinces and territories subject
to a tax collection agreement must use the federal definition of "taxable
income," i.e., they are not allowed to provide deductions in calculating taxable
income. These provinces and territories may provide tax credits to companies;
often in order to provide incentives for certain activities such as mining
exploration, film production, and job creation.
Ontario, Quebec and Alberta collect their own corporate income taxes, and
therefore may develop their own definitions of taxable income. In practice,
these provinces rarely deviate from the federal tax base in order to maintain
simplicity for taxpayers.
Ontario has concluded negotiations with the federal government on a tax
collection agreement under which its corporate income taxes would be collected
on its behalf by the CRA starting in 2009.

Integration of corporate and personal income taxes
In Canada, corporate income is subject to corporate income tax and, on
distribution as dividends to individuals, personal income tax. The personal
income tax system, through the gross-up and dividend tax credit (DTC)
mechanisms, currently provides recognition for corporate taxes, based on a 20


                                        8
per cent notional federal-provincial rate, to taxable individuals resident in
Canada.
Because of tax policy issues relating to the proliferation of publicly traded
income trusts, the federal government has proposed to introduce an enhanced
gross-up and DTC for eligible dividends received by eligible shareholders. An
eligible dividend will be grossed-up by 45 per cent, meaning that the
shareholder includes 145 per cent of the dividend amount in income. The DTC
in respect of eligible dividends will be 19 per cent, based on the expected
federal corporate tax rate in 2010. The existing gross-up and tax credit will
continue to apply to other dividends. Eligible dividends will generally include
dividends paid after 2005 by public corporations (and other corporations that
are not Canadian-controlled private corporations) that are resident in Canada
and subject to the general corporate income tax rate.

Administration
Federal taxes are collected by the Canada Revenue Agency (CRA), formerly
known as "Revenue Canada" or the "Canada Customs and Revenue Agency".
Under "Tax Collection Agreements", CRA collects and remits to the provinces:
    Provincial personal income taxes on behalf of all provinces except
      Quebec, so that individuals outside of Quebec file only one set of tax
      forms each year for their federal and provincial income taxes.
    Corporate taxes on behalf of all provinces except Quebec and Alberta.
The Ministère du revenu du Québec collects the GST in Quebec on behalf of the
federal government, and remits it to Ottawa.
The provincial governments of Nova Scotia, New Brunswick and
Newfoundland and Labrador no longer impose a provincial sales tax and in
those provinces the federal government collects goods and services tax at a rate
8% higher than in the other provinces. The additional revenue from this
"harmonized sales tax" is paid by the federal government to the three
harmonizing provinces.


Income taxes
Personal income taxes
Both the federal and provincial governments have imposed income taxes on
individuals, and these are the most significant sources of revenue for those
levels of government accounting for over 40% of tax revenue. The federal
government charges the bulk of income taxes with the provinces charging a
somewhat lower percentage. Income taxes throughout Canada are progressive
with the high income residents paying a higher percentage than the low income
residents.
Where income is earned in the form of a capital gain, only half of the gain is
included in income for tax purposes; the other half is not taxed.
                                       9
Federal and provincial income tax rates are shown at Canada Revenue Agency's
website.
Personal income tax can be deferred in a Registered Retirement Savings Plan
(RRSP) and tax sheltered savings accounts (which may include mutual funds
and other financial instruments) that are intended to help individuals save for
their retirement.

Corporate taxes
Companies and corporations pay tax on profit income and on capital. These
make up a relatively small portion of total tax revenue. Tax is paid on corporate
income at the corporate level before it is distributed to individual shareholders
as dividends. A tax credit is provided to individuals who receive dividend to
reflect the tax paid at the corporate level. This credit does not eliminate double
taxation of this income completely, however, resulting in a higher level of tax
on dividend income than other types of income. (Where income is earned in the
form of a capital gain, only half of the gain is included in income for tax
purposes; the other half is not taxed.) Corporations may deduct the cost of
capital following capital cost allowance regulations.
Starting in 2002, several large companies converted into "income trusts" in
order to reduce or eliminate their income tax payments, making the trust sector
the fastest-growing in Canada as of 2005. Conversions were largely halted on
October 31, 2006, when Finance Minister Jim Flaherty announced that new
income trusts would be subject to a tax system similar to that of corporations,
and that these rules would apply to existing income trusts after 2011.

Sales taxes
The federal government levies a multi-stage sales tax of 5% (6% prior to
January 1, 2008), that is called the Goods and Services Tax (GST), and, in some
provinces, the Harmonized Sales Tax (HST). The GST/HST is similar to a
value-added tax.
All provincial governments except Alberta levy sales taxes as well. The
provincial sales taxes of Nova Scotia, New Brunswick and Newfoundland and
Labrador are harmonized with the GST. That is, a rate of 13% HST is charged
instead of separate PST and GST. Both Quebec and Prince Edward Island apply
provincial sales tax to the sum of price and GST. The territories of Nunavut,
Yukon and Northwest Territories do not charge provincial sales tax.
Provincial and federal sales tax rates at the retail level on goods and some
services are as follows:




                                        10
  Province                                        HST GST PST Total Tax
  Alberta                                                5%             5%
  British Columbia                                       5%    7%       12%
  Manitoba                                               5%    7%       12%
  New Brunswick                                    13%                  13%
  Newfoundland and Labrador                        13%                  13%
  Nova Scotia                                      13%                  13%
  Ontario                                                5%    8%       13%
  Prince Edward Island                                   5% 10%        15.5%
  Quebec                                                 5% 7.5% 12.875%*
  Saskatchewan                                          5% 5%        10%
 * In Québec and PEI, PST is calculated on the total price including GST

Property taxes
The municipal level of government is funded largely by property taxes on
residential, industrial and commercial properties. These account for about ten
percent of total taxation in Canada.

Excise taxes
Both the federal and provincial governments impose excise taxes on inelastic
goods such as cigarettes, gasoline, alcohol, and for vehicle air conditioners. A
great bulk of the retail price of cigarettes and alcohol are excise taxes. The
vehicle air conditioner tax is currently set at $100 per air conditioning unit.
Canada has some of the highest rates of taxes on cigarettes and alcohol in the
world. These are sometimes referred to as sin taxes.

Payroll taxes
Ontario levies a payroll tax on employers, the "Employer Health Tax", of 1.95%
of payroll. Eligible employers are exempt on the first $400,000 of payroll. This
tax was designed to replace revenues lost when health insurance premiums,
which were often paid by employers for their employees, were eliminated in
1989.
Quebec levies a similar tax called the "Health Services Fund". For those who
are employees, the amount is paid by employers as part of payroll. For those
who are not employees such as pensioners and self-employed individuals, the
amount is paid by the taxpayer.

                                        11
Premiums for the Employment Insurance system and the Canada Pension Plan
are paid by employees and employers. Premiums for Workers' Compensation
are paid by employers. These premiums account for 12% of government
revenues. These premiums are not considered to be taxes because they create
entitlements for employees to receive payments from the programs, unlike
taxes, which are used to fund government activities. The funds collected by the
Canada Pension Plan and by the Employment Insurance are in theory separated
from the general fund. It should be noted that Unemployment Insurance was
renamed to Employment Insurance to reflect the increased scope of the plan
from its original intended purpose.
Employment Insurance is unlike private insurance because the individual's
yearly income impacts the received benefit. Unlike private insurance, the
benefits are treated as taxable earnings and if the individual had a mid to high
income for the year, they could have to repay up to the full benefit received.



Health and Prescription Insurance Tax
Ontario charges a tax on income for the health system. These amounts are
collected through the income tax system, and do not determine eligibility for
public health care. The Ontario Health Premium is an additional amount
charged on an individual's income tax that ranges from $300 for people with
$20,000 of taxable income to $900 for high income earners. Individuals with
less than $20,000 in taxable income are exempt.
Quebec also requires residents to obtain prescription insurance. When an
individual does not have insurance, they must pay an income-derived premium.
As these are income related, they are considered to be a tax on income under the
law in Canada.
Other provinces, such as British Columbia, charge premiums collected outside
of the tax system for the provincial medicare systems. These are usually reduced
or eliminated for low-income people.
Alberta does not levy any taxes or premiums for its provincial medicare.

Estate tax
Since the government of Pierre Trudeau repealed Canada's inheritance tax in
1972, estates have been treated as sales (a "deemed disposition") upon death,
except where the estate is inherited by a surviving spouse or common law
partner. Tax owing is paid by the estate, and not by the beneficiaries. Registered
Retirement Savings Plans and Registered Retirement Income Funds are wound
down, and the assets are distributed to beneficiaries are treated as withdrawals,
i.e., they are taxed as part of the income of the estate at the normal applicable
personal income tax rates with no reduction for capital gains. Non-registered

                                        12
capital assets are treated as having been sold, and are taxed at the applicable
capital gains tax rates.[2] Interest or other income from non-registered non-
capital assets that is accrued up to the date of death is taxed on the final tax
return of the deceased as the normal tax rates, and is not included on the tax
return of the estate.

International taxation
Canadian individuals and corporations pay income taxes based on their world-
wide income. They are protected against double taxation through the foreign tax
credit, which allows taxpayers to deduct from their Canadian income tax
otherwise payable from the income tax paid in other countries. A citizen who is
currently not a resident of Canada may petition the CRA to change his status so
that income from outside Canada is not taxed.

            International comparison (personal income tax)
Comparison of taxes paid by a household earning the country's average wage (as of 2005)

                      Single       Married                         Single       Married
    Country                                           Country
                    no children   2 children                     no children   2 children

Australia             28.3%        16.0%       Korea               17.3%        16.2%
Austria               47.4%        35.5%       Luxembourg          35.3%        12.2%
Belgium               55.4%        40.3%       Mexico              18.2%        18.2%
Canada                31.6%        21.5%       Netherlands         38.6%        29.1%
Czech Republic        43.8%        27.1%       New Zealand         20.5%        14.5%
Denmark               41.4%        29.6%       Norway              37.3%        29.6%
Finland               44.6%        38.4%       Poland              43.6%        42.1%
France                50.1%        41.7%       Portugal            36.2%        26.6%
Germany               51.8%        35.7%       Slovak Republic     38.3%        23.2%
Greece                38.8%        39.2%       Spain               39.0%        33.4%
Hungary               50.5%        39.9%       Sweden              47.9%        42.4%
Iceland               29.0%        11.0%       Switzerland         29.5%        18.6%
Ireland               25.7%         8.1%       Turkey              42.7%        42.7%
Italy                 45.4%        35.2%       United Kingdom      33.5%        27.1%
Japan                 27.7%        24.9%       United States       29.1%        11.9%

Source: OECD, 2005 data




                                                 13
    Mercer Cost of Living Survey – Worldwide Rankings, 2009

 The indices are based on Mercer's cost of living database and are
 modified to include rental accommodation costs and to reflect
 constant weighting and basket items. We do not recommend that
 expatriates use the figures represented here to compare their own
 compensation packages.
    Rankings                                           COL Index
 March March                                      March
  2009     2008          City         Country     2009 March 2008
     1         2 Tokyo              Japan        143.7           127
     2        11 Osaka              Japan        119.2           110
     3         1 Moscow             Russia       115.4          142.4
     4         8 Geneva             Switzerland 109.2           115.8
     5         6 Hong Kong          Hong Kong 108.7             117.6
     6         9 Zurich             Switzerland 105.2           112.7
     7         7 Copenhagen         Denmark      105.0          117.2
     8        22 New York City US                100.0          100.0
     9        20 Beijing            China          99.6         101.9
    10        13 Singapore          Singapore      98.0         109.1
   134      133 Tunis               Tunisia        58.4          64.4
                   Chennai
   135      117
                   (Madras)         India          57.7          69.3
   136      142 Quito               Ecuador        56.3          54.6
   137      108 Mexico City         Mexico         55.5          73.6
                                    New
   138        78
                   Auckland         Zealand        54.0            81
                                    New
   139        93
                   Wellington       Zealand        52.3          77.6
   140      141 Karachi             Pakistan       50.7          54.7
   141      143 Asuncion            Paraguay       49.9          52.5
   142      131 Monterrey           Mexico         49.8          65.8
                                    South
   143      140
                   Johannesburg Africa             49.6          60.4


Source: http://www.finfacts.ie/costofliving.htm



                                             14
Canada Pension Plan
The Canada Pension Plan (CPP) is a contributory, earnings-related social
insurance program. It forms one of the two major components of Canada's
public retirement income system, the other component being Old Age Security
(OAS). Other parts of Canada's retirement system are private pensions, either
employer-sponsored or from tax-free individual savings (known in Canada as a
Registered Retirement Savings Plan).
The CPP program mandates all employed Canadians who are 18 years of age
and over to contribute a prescribed portion of their earnings income to a
nationally administered pension plan. The plan is administered by Human
Resources and Social Development Canada on behalf of employees in all
provinces and territories except Quebec, which operates an equivalent plan, the
Quebec Pension Plan. Changes to the CPP require the approval of at least 2/3 of
Canadian provinces representing at least 2/3 of the country's population. In
addition, under section 94A of the Canadian Constitution, pensions are a
provincial responsibility, so any province may establish a plan anytime.
Lester Bowles Pearson oversaw the implementation of the CPP as Prime
Minister.
The CPP is funded on a "steady-state" basis, with its current contribution rate
set so that it will remain constant for the next 75 years, by accumulating a
reserve fund sufficient to stabilize the asset/expenditure and funding ratios over
time. Such a system is a hybrid between a fully funded one and a "pay-as-you-
go" plan. In other words, assets held in the CPP fund are by themselves
insufficient to pay for all future benefits accrued to date but sufficient to prevent
contributions from rising any further. While a sustainable path for this particular
plan, it is not typical of other public or private sector pension plans. A study
published in April 2007 by the CPP's chief actuary showed that this type of
funding method is "robust and appropriate" given reasonable assumptions about
future conditions. The chief actuary submits a report to Parliament every three
years on the financial status of the plan.

Contents
     History
     Contributions and Benefits
     CPP Investment Board
          3.1 Socially Responsible Investing
          3.2 Future and Direction
          3.3 Growth and Strategy
          3.4 Performance
     Quebec Pension Plan (QPP)
     References
     External links

                                         15
History
Initial plans for a public contributory pension plan in Canada were drawn from
1957 to 1963, under the Conservative governments of Prime Minister John G.
Diefenbaker, but the final details of the CPP were only settled under the Liberal
governments of Lester B. Pearson, between 1963 and 1965. Negotiations with
the government of Quebec were also important in shaping the program, because
of the need to amend the Canadian Constitution (i) to include disability and
survivor benefits in the federal plan, combined with (ii) Quebec's desire to
establish its own scheme. After section 94A of the Constitution was amended in
1964 to settle both points, the CPP was launched at the start of 1966 (all of the
preceding history is described in "Wrestling With the Poor Cousin: Canada
Pension Plan Disability Policy and Practice, 1964 - 2001").
At its inception, the prescribed CPP contribution rate was 1.8% of an
employee's gross income up to an annual maximum. Over time, the contribution
rate was increased slowly. However, by the 1990s, it was concluded that the
"pay-as-you-go" structure would lead to excessively high contribution rates
within 20 years or so, due to Canada's changing demographics, increased life
expectancy of Canadians, a changing economy, benefit improvements and
increased usage of disability benefits (all as referenced in the Chief Actuary's
study of April 2007, noted above). The same study reports that the reserve fund
was expected to run out by 2015. This impending pension crisis sparked an
extensive review by the federal and provincial governments in 1996. As a part
of the major review process, the federal government actively conducted
consultations with the Canadian public to solicit suggestions, recommendations,
and proposals on how the CPP could be restructured to achieve sustainability
once again. As a direct result of this public consultation process and internal
review of the CPP, the following key changes were proposed and jointly
approved by the Federal and provincial governments in 1997:
     Total CPP contribution rates (employer/employee combined) were
        increased annually from 6% of pensionable earnings in 1997 to 9.9% by
        2003.
     Continuously seek out ways to reduce CPP administration and operating
        costs.
     Move towards a hybrid structure to take advantage of investment earnings
        on accumulated assets. Instead of a "pay-as-you-go" structure, the CPP is
        expected to be 20% funded by 2014, such funding ratio to constantly
        increase thereafter towards 30% by 2075 (that is, the CPP Reserve Fund
        will equal 30% of the "liabilities" - or accrued pension obligations).
     Creation of the CPP Investment Board (CPPIB).
     Review the CPP and CPPIB every 3 years.




                                       16
Contributions and Benefits
In 2007, the prescribed contribution rate is 4.95% of a salaried worker's gross
employment income between $3,500 and $43,700, up to a maximum
contribution of $1,989.90. The employer matches the employee contribution,
effectively doubling the contributions of the employee. If a worker is self-
employed, he/she must pay both halves of the contribution. The rate of 4.95%
has been in effect since 2003.
Historical contribution rates and contributory earnings can be found in Table A
of this document.
When the contributor reaches the normal retirement age of 65 (a reduced
pension is available from age 60), the CPP provides regular pension benefit
payments to the contributor, calculated as 25% of the average contributory
maximum over the entire working life of a contributor (not just the last 5 years).
There are provisions that enable the lower-earnings years in a contributor's
contributory period to be dropped out due to disability, child rearing, or other
reasons. CPP benefit payments are taxable as ordinary income. The CPP also
provides disability pensions to eligible workers who become disabled in a
severe and prolonged fashion, and survivor benefits to survivors of workers who
die before they begin receiving retirement benefits. If an application for
disability pension is denied, an appeal can be made for reconsideration, and then
to the Canada Pension Plan / Old Age Security Review Tribunals or Pension
Appeals Boards (POA).

CPP Investment Board
Under the direction of then Finance Minister Paul Martin, the CPP Investment
Board was created in 1997 as an organization independent of the government to
monitor and invest the funds held by the CPP. In turn, the CPP Investment
Board created the CPP Reserve Fund. The CPP Investment Board is a crown
corporation created by an Act of Parliament. It reports quarterly on its
performance, has a professional management team to oversee the operation of
various aspects of the CPP reserve fund and also to plan changes in direction,
and a board of directors that is accountable to but independent from the federal
government.

Socially Responsible Investing
The growing issue of socially responsible investing has been raised for the
CPPIB, with civil society groups like ACT for the Earth and Interprets
expressing concerns about the investment policies of the CPP Investment
Board, alleging potential conflicts of interest or asking for the adoption of
ethical investment policies. These groups have criticized the CPP's investments
in arms manufacturers, tobacco companies, big oil, and companies that engage
in criminal activities. The CPP Investment Board (CPPIB) has responded with a

                                        17
Policy on Responsible Investing. ACT for the Earth countered this with its own
report, Against Common Sense, which argues that the CPPIB uses its proxy
shares in a wide array of companies "to vote against peace, ecology, and human
rights at numerous corporate shareholder meetings," in direct violation of its
own responsible investing policies.

Future and Direction
David Denison is the current Chief Executive Officer of the Canada Pension
Plan Investment Board. An article in the May 18, 2006 Globe and Mail reported
that the CPPIB plans to increase the fund's foreign investments. According to
the 2007 Annual Report, about 45% of the fund's assets are now invested in
securities domiciled outside Canada, largely in the United States and Western
Europe. In addition, the CPPIB has been broadening the scope its investments to
include emerging markets, although Mr. Denison would not pinpoint a specific
country or area. ―Canada as a single market cannot accommodate the future
growth of our organization,‖ said Mr. Denison.
In recent years, the CPPIB has also changed direction in its investment
philosophy. It evolved from investing exclusively in non-marketable
government bonds to passive index-fund strategies and, more recently, to active
investment strategies.

Growth and Strategy
The CPP reserve fund receives its funds from the CPP and invests them like a
typical large fund manager would. The CPP reserve fund seeks to achieve at
least the projected return (inflation-adjusted) needed to help sustain the CPP, a
rate set at 4.1% by 2020 in the CPP actuary's report, grading down from 5.0% in
2005. As indicated in its Financial Highlights for the fiscal year ended March
31, 2007 (document consulted on Aug. 3, 2007), the CPP reserve fund averaged
13.6% return in the past 4 years, well in excess of Canadian inflation rates.
The CPP reserve fund is aiming to achieve the following growth targets (in
assets):
     $147 billion by 2010.
     $200 billion by 2015.
     $592 billion by 2030.
     $1.55 trillion by 2050.
The strategies used to achieve these targets are listed on the CPPIB website, and
include the following:

   1. Diversification. In 1997, the CPP fund was 100% invested in federal
      government bonds, but it has since diversified not only by asset class, but
      also internationally.



                                       18
   2. Employing basic asset allocation theories. With diversification of
      investments as one of their objectives, the current asset mix is now as
      follows:
           Public Equity => 51.8%
           Fixed Income => 25.6%
           Private equity => 10.9%
           Inflation Sensitive Assets => 11.7%
   3. Using equity firms to assist in achieving targets for each asset class. The
      CPP reserve fund allocates certain amounts to various pre-qualified
      equity firms to be managed and used towards reaching the growth targets.
      For example, the CPP Investment Board hires private equity firms to help
      it invest in private companies, fund managers to help it invest in public
      equities, bond managers to assist in investing in bonds (within Canada
      and foreign bonds), and so forth.

Performance
The total growth of the CPP Reserve Fund is derived from the CPP
contributions of working Canadians, and the return on investment of the
contributions. The portion of CPP Reserve Fund growth due to CPP
contributions varies from year to year, but has shown a slight decrease in the
years 2008/2009. The historical growth with the investment performance is
tabulated as follows:

               Date               Net Asset Value (CAD)*     Rate of Return (annual)**

             Mar 2003             $55.6 Billion            -1.1%

             Mar 2004             $70.5 Billion            +10.3%

             Mar 2005             $81.3 Billion            +8.5%

             Mar 2006             $98 Billion              +15.5%

             Mar 2007             $116.6 Billion           +12.9%

             Mar 2008***          $122.7 Billion           -0.29%

             Mar 2009             $105.5 Billion           -18.6%

             Mar 2010             116.6 Billion            7.6%


*Assets are as at the period end date (March 31).
**Commencing in fiscal 2007, the rate of return reflects the performance of the
CPP Fund which excludes the short-term cash required to pay current benefits.
***Increased fund value due to worker and employer CPP contributions not
needed to pay current benefits. The negative investment return amounted to
$303 million CAD

                                         19
Canada Pension Plan (CPP)
You have to deduct CPP contributions from an employee's remuneration if that
employee:
       is 18 years or older, but younger than 70;
       is in pensionable employment during the year; and
       Does not receive a CPP or QPP retirement or disability pension.
Use the CPP contributions rates, maximums and exemptions Chart, to determine
how much CPP contributions to deduct.
As an employer, you must also contribute the same amount of CPP that you
deduct from your employees' remuneration.

Employment not subject to CPP
Do not deduct CPP contributions from payments for these types of employment:
 employment in agriculture, an agricultural enterprise, horticulture, fishing,
   hunting, trapping, forestry, logging, and lumbering, by an employer:
 who pays the employee less than $250 in cash remuneration in a calendar
   year or
 employs the employee for a period of less than 25 working days in the same
   year on terms providing for payment of cash remuneration —the working
   days don't have to be consecutive;
Note
In a calendar year, when the employee reaches $250 or more in cash
remuneration or works 25 days or more, the employment is pensionable starting
from the first day of work.
     casual employment if it is for a purpose other than your usual trade or
       business;
     employment as a teacher on exchange from a foreign country;
     employment of a spouse or common-law partner if you cannot deduct the
       remuneration paid as an expense under the Income Tax Act;
     employment of your child or a person that you maintain if no cash
       remuneration is paid;
     employment of a person in a rescue including disaster operation, as long
       as you do not regularly employ that person for that purpose;
     employment of a person in connection with a circus, fair, parade,
       carnival, exposition, exhibition, or other similar activity, except for
       entertainers, if that person:
 is not your regular employee; and
 works for less than seven days in the year;


Note (1)
When the employee works seven days or more, the employment is pensionable
from the first day of work.

                                      20
    employment by a government body as an election worker if the worker:
        is not a regular employee of the government body; and
        works for less than 35 hours in a calendar year;

Note (2)
     When the employee works 35 hours or more, the employment is
       pensionable from the first day worked.
     Employment of a member of a religious order who has taken a vow of
       perpetual poverty. This applies whether the remuneration is paid directly
       to the order or the member pays it to the order.
For information on situations when CPP contributions are required, see
Amounts and benefits subject to CPP contributions.
If you are not sure whether you should deduct CPP after reading these pages,
you can request a ruling.

Sales taxes in Canada
In Canada there are three types of sales taxes: provincial sales taxes or PST, the
federal Goods and Services Tax or GST, and the Harmonized Sales Tax or
HST.
Every province except Alberta implements a Provincial Sales Tax or the
Harmonized Sales Tax. The Yukon, Northwest Territories and Nunavut do not
have any type of regional sales tax. The federal GST rate is 5% effective
January 1, 2008.
    Goods & Services Tax
    Harmonized Sales Tax
    Provincial Sales Taxes


Goods & Services Tax
The federal government's sales tax is a value-added tax.

Harmonized Sales Tax
The Harmonized Sales Tax (HST) is used in certain provinces to combine the
federal Goods and Services Tax (GST) and the Provincial Sales Tax (PST) into
a single, blended, sales tax. Currently, there is a 13% HST in the provinces of
New Brunswick, Newfoundland, and Nova Scotia. The HST is collected by the
Canada Revenue Agency, which then remits the appropriate amounts to the
participating provinces. Like the GST, the HST is value-added. Effective July 1,
2010 British Columbia and Ontario will adopt HST replacing their current PST
at 12% and 13% respectively.

Provincial Sales Taxes
Separate Provincial Sales Taxes (PST) are collected in the provinces of British
Columbia, Saskatchewan, Manitoba, Ontario, Quebec (called QST for Quebec

                                        21
Sales Tax, in French TVQ, Taxes des Ventes du Québec), and Prince Edward
Island. Goods to which the tax is applied varies by province, as does the rate.
Moreover, for those provinces whose provincial sales tax is applied to the
combined cost and GST, provincial revenues decline or increase with respective
changes in the GST. Of the provincial sales taxes, only the QST (and the HST)
are value-added; the rest are cascading taxes.

                   Rate     Combined
     Province                                                          Note
                   (%) fed./prov. rate (%)

                                              food, fuel,children's sized clothes and footwear as
                                             well as some other items and service are exempted
                                             (see Sales taxes in British Columbia for more detail)
British Columbia   7     12                   Alcohol is taxed at 10%.
                                              Passenger vehicles are taxed at between 7% to 10%
                                             based on purchase price.
                                              Harmonized Sales Tax takes effect on July 1, 2010.
                                              Alberta hasno provincial sales tax. There is a 4%
Alberta            0     5
                                             tax on lodging.
                                              Reduced from 7% on 28 October 2006
                                              There is a separate 10% liquor consumption tax.
Saskatchewan       5     10
                                             The non-alcoholic portion of a restaurant meal is not
                                             taxed.
Manitoba           7     12                  
                                              PST  is usually 8%, but is 5% on lodging, 10% on
                                             entertainment and alcohol at restaurants and 12% on
Ontario            8     13                  alcohol at retail stores on top of the flat LCBO liquor
                                             mark-ups.
                                              Harmonized Sales Tax takes effect on July 1, 2010.
                                              Provincialrate is nominally 7.5%, but also applied
Quebec             7.5   12.875
                                             to federal 5% GST. Effectively 7.875%
Prince Edward                                 Provincialrate is nominally 10%, but also applied
Island
                   10    15.5
                                             to federal 5% GST. Effectively 10.5%
New Brunswick      13
Nova Scotia        13                         Harmonized    Sales Tax includes provincial tax and
Newfoundland and                             GST
Labrador
                   13




                                                 22
GST/HST rates
Goods and services tax/harmonized sales tax (GST/HST) is a tax that applies on
most supplies of goods and services made in Canada. GST/HST also applies to
intangible property such as trademarks, rights to use a patent, digitized products
downloaded from the Internet and paid for individually, and options to purchase
property.
The three participating provinces (Nova Scotia, New Brunswick, and
Newfoundland and Labrador) harmonized their provincial sales tax with GST to
create the harmonized sales tax (HST). HST applies to the same base of goods
and services as GST.




                                        23
                                                 Non-Refundable Tax Credit Blocks BC / 2000-2010
                                                                                                                       Base Amount                                                                            Subject
              Credit                                                                                                                                                                                            to
                                        2000          2001          2002          2003          2004          2005            2006          2007          2008          2009          2010                   Indexing
Personal Credits
Basic Personal Amount                     $7,231        $8,000        $8,168        $8,307        $8,523          $8,676        $8,858        $9,027        $9,189        $9,373                  $11,000      yes
Spousal                                   $6,140        $6,850        $6,994        $7,113        $7,298          $7,429        $7,585        $7,729        $7,868        $8,026                   $9,653      yes
Reduced when spousal income
                                          ($614)        ($685)        ($699)        ($711)        ($730)          ($743)        ($759)        ($773)        ($787)        ($803)                   ($965)
exceeds
Eligible Dependant                        $6,140        $6,850        $6,994        $7,113        $7,298          $7,429        $7,585        $7,729        $7,868        $8,026                   $9,653      yes
Reduced when dependant income
                                          ($614)        ($685)        ($699)        ($711)        ($730)          ($743)        ($759)        ($773)        ($787)        ($803)                   ($965)
exceeds
Infirm Dependant Credit                   $2,386        $2,424        $3,574        $3,635        $3,730          $3,797        $3,876        $3,949        $4,021        $4,101                   $4,118      yes
Reduced when dependant income
                                        ($11,661)      ($5,576)      ($5,693)      ($5,790)      ($5,940)      ($6,047)        ($6,174)      ($6,292)      ($6,405)      ($6,533)                 ($6,559)
exceeds
In-home care of relative                  $2,386        $2,424        $3,574        $3,634        $3,730          $3,796        $3,877        $3,949        $4,021        $4,101                   $4,118      yes
Reduced when relative's income
                                         ($4,845)     ($11,848)     ($12,096)     ($12,302)     ($12,621)     ($12,849)       ($13,118)     ($13,368)     ($13,608)     ($13,881)                ($13,936)
exceeds
Age (65 or older by end of
                                          $3,531        $3,587        $3,663        $3,725        $3,822          $3,891        $3,972        $4,048        $4,121        $4,203                   $4,220      yes
taxation year)
Reduced when income exceeds             ($26,284)     ($26,705)     ($27,265)     ($27,729)     ($28,450)     ($28,962)       ($29,570)     ($30,132)     ($30,674)        ($31)                    ($31)
Pension Credit                             $1,000        $1,000        $1,000        $1,000        $1,000        $1,000          $1,000        $1,000        $1,000       $1,000                   $1,000      no
Adoption Expense Credit
Based on actual adoption expenses         -             -             -             -             -               -             -           Actual        Actual        Actual        Actual                   no
to a maximum of '1' (based on
federal indexed maximum amount)
Charitable and other gifts
Lowest tax rate on first $200;          Actual        Actual        Actual        Actual        Actual        Actual          Actual        Actual        Actual        Actual        Actual                   no
highest tax rate on excess
Medical Expense Credit
Reduced by lesser of '2' or 3% of       Actual        Actual        Actual        Actual        Actual        Actual          Actual        Actual        Actual        Actual        Actual                   yes
net income
Credit for Mental or Physical
                                          $4,293        $4,362        $6,126        $6,230        $6,392          $6,507        $6,644        $6,770        $6,892        $7,030                   $7,058      yes
Impairment
Credit for Mental or Physical
                                          $2,941        $2,988        $3,574        $3,635        $3,729          $3,796        $3,876        $3,950        $4,021        $4,101                   $4,118      yes
Impairment for child under 18
Reduced by attendant care and child
care expenses in excess of '3'
                                          $2,000        $2,032        $2,075        $2,110        $2,165          $2,204        $2,250        $2,293        $2,334        $2,381                   $2,391
claimed in respect of the impaired
child
Tuition Credit                          Actual        Actual        Actual        Actual        Actual        Actual          Actual        Actual        Actual        Actual        Actual                   no
Education
Full-time student                     $200/month    $200/month    $200/month    $200/month    $200/month    $200/month      $200/month    $200/month    $200/month    $200/month    $200/month
Part-time student                      $60/month     $60/month     $60/month     $60/month     $60/month     $60/month       $60/month     $60/month     $60/month     $60/month     $60/month                 no
Student Loan Interest                    Actual        Actual        Actual        Actual        Actual        Actual          Actual        Actual        Actual        Actual        Actual                  no
EI and CPP Credit                        Actual        Actual        Actual        Actual        Actual        Actual          Actual        Actual        Actual        Actual        Actual                  no




                                        2000          2001          2002          2003          2004          2005            2006          2007          2008          2009          2010
                                  1       -             -             -             -             -             -               -          $10,445       $10,643       $10,909                   $10,975
                                  2      $1,637        $1,633        $1,698        $1,727        $1,772        $1,804          $1,842        $1,877        $1,911        $1,949                   $1,957
                                  3      $2,000        $2,032        $2,075        $2,110        $2,165        $2,204          $2,250        $2,293        $2,334        $2,381                   $2,391
                                                                                                             24
2010 indexation adjustment for personal income tax
and benefit amounts
Each year, certain personal income tax and benefit amounts are indexed to inflation using the
Consumer Price Index data as reported by Statistics Canada.

Increases to tax bracket thresholds, amounts relating to non-refundable credits, and most
other amounts will take effect on January 1, 2010. However, increases to the Canada Child
Tax Benefit (including the National Child Benefit Supplement and the Child Disability Benefit)
and the goods and services tax credit will take effect on July 1, 2010, to coincide with the
beginning of the program year for payment of these benefits.

The following chart compares the indexed amounts for the 2009 and 2010 tax years. It
reflects an indexation increase of 0.6% for 2010.


 Year                                                                   2010 ($) 2009 ($)
Tax bracket thresholds
                                                                                             [1]
Taxable income above which the 22% bracket begins                         40,970 40,726
                                                                                             [1]
Taxable income above which the 26% bracket begins                         81,941 81,452
Taxable income above which the 29% bracket begins                       127,021     126,264
Amounts relating to non-refundable tax credits
                                                                                             [1]
Basic personal amount                                                     10,382 10,320
                                                                                             [1]
Age amount                                                                 6,446     6,408
Net income threshold                                                      32,506      32,312
                                                                                             [1]
Spouse or common-law partner amount (max.)                                10,382 10,320
                                                                                             [1]
Amount for an eligible dependant (max.)                                   10,382 10,320
Amount for children under age 18 (max. per child)                          2,101       2,089
Canada employment amount (max.)                                            1,051       1,044
Infirm dependant amount (max. per dependant)                               4,223       4,198
Net income threshold                                                       5,992       5,956
Caregiver amount (max. per dependant)                                      4,223       4,198
Net income threshold                                                      14,422      14,336
Disability amount                                                          7,239       7,196
Supplement for children with disabilities (max.)                           4,223       4,198
Threshold relating to allowable child care and attendant care              2,473       2,459
expenses
Adoption expenses (max. per adoption)                                     10,975      10,909
Medical expense tax credit—3% of net income ceiling                        2,024       2,011
Refundable medical expense supplement
  Maximum supplement                                                       1,074       1,067
  Minimum earnings threshold                                               3,135       3,116
  Family net income threshold                                             23,775      23,633
Old Age Security repayment threshold                                      66,733      66,335




                                              25
Certain board and lodging allowances paid to players
on sports teams or members of recreation programs
Income exclusion (max. per month)                                           315        313
Tradesperson’s tools deduction
Threshold amount relating to cost of eligible tools                       1,051      1,044
Goods and services tax credit
Adult maximum                                                               250        248
Child maximum                                                               131        130
Single supplement                                                           131        130
Phase-in threshold for the single supplement                              8,096      8,047
Family net income at which credit begins to phase out                   32,506     32,312
Canada Child Tax Benefit
Base benefit                                                              1,348      1,340
Additional benefit for third child                                           94         93
                                                                                            [1]
Family net income at which base benefit begins to phase out             40,970 40,726
National Child Benefit (NCB) supplement
First child                                                               2,088      2,076
Second child                                                              1,848      1,837
Third child                                                               1,758      1,747
                                                                                            [2]
Family net income at which NCB supplement begins to phase out           23,855 23,710
                                                                                            [1]
Family net income at which NCB supplement phase-out is complete         40,970 40,726
Canada Disability Benefit (CDB)
Maximum benefit                                                           2,470      2,455
                                                                                            [1]
Family net income at which CDB supplement begins to phase out           40,970 40,726
Children’s Special Allowances (CSA)
CSA Base Amount                                                           3,436      3,416


Notes:[1] Under changes announced in the January 27, 2009 Federal Budget, certain
values changed for 2009 as follows:

             The upper taxable income threshold of the 15% tax bracket was increased to
              $40,726.
             The upper taxable income threshold of the 22% tax bracket was increased to
              $81,452.
             The basic personal amount, the maximum spouse or common-law partner
              amount, and the maximum amount for an eligible dependant were increased to
              $10,320.
             The maximum age amount was increased to $6,408.
             The family net income at which the CCTB and CDB begins to be phased out and at
              which the NCB supplement phase-out is complete for most families, changed to
              $40,726.

[2] The 2009 value increased to $23,710 as a result of changes to the federal tax bracket
threshold amounts as noted in Note 1, above.



                                               26
Indexation adjustment for personal income tax and benefit
amounts / 2005-2010
                                                           2005          2006        2007       2008       2009       2010
                                                            ($)           ($)         ($)        ($)        ($)        ($)
Tax bracket thresholds
Taxable income above which the 22% bracket begins               35,595    36,378     37,178     37,885     40,726     40,970
Taxable income above which the 26% bracket begins               71,190    72,756     74,357     75,769     81,452     81,941
                                                                          118,28     120,88     123,18     126,26     127,02
Taxable income above which the 29% bracket begins           115,739
                                                                               5          7          4         4          1
Amounts relating to non-refundable tax credits
Basic personal amount                                            8,648     9,039      9,600      9,600     10,320     10,382
Age amount                                                       3,979     4,066      5,177      5,276      6,408      6,446
Net income threshold                                            29,619    30,270     30,936     31,524     32,312     32,506
Spouse or common-law partner amount (max.)                       7,344     7,675      9,600      9,600     10,320     10,382
Amount for an eligible dependant (max.)                     -             7,505       9,600      9,600     10,320     10,382
Amount for children under age 18 (max. per child)           -               -         2,000      2,038      2,089      2,101
Canada employment amount (max.)                             -               -         1,000      1,019      1,044      1,051
Infirm dependant amount (max. per dependant)                     3,848     3,933      4,019      4,095      4,198      4,223
Net income threshold                                             5,460     5,580      5,702      5,811      5,956      5,992
Caregiver amount (max. per dependant)                            3,848     3,933      4,019      4,095      4,198      4,223
Net income threshold                                            13,141    13,430     13,726     13,986     14,336     14,422
Disability amount                                                6,596     6,741      6,890      7,021      7,196      7,239
Supplement for children with disabilities (max.)                 3,848     3,933      4,019      4,095      4,198      4,223
Threshold relating to allowable child care and attendant
                                                                 2,254     2,303      2,354      2,399      2,459      2,473
care expenses
Adoption expenses (max. per adoption)                           10,000    10,220     10,445     10,643     10,909     10,975
Medical expense tax credit—3% of net income ceiling              1,844     1,884      1,926      1,962      2,011      2,024
Refundable medical expense supplement
 Maximum supplement                                               750      1,000      1,022      1,041      1,067      1,074
 Minimum earnings threshold                                      2,857     2,919      2,984      3,040      3,116      3,135
 Family net income threshold                                    21,663    22,140     22,627     23,057     23,633     23,775
Old Age Security repayment threshold                            60,806    62,144     63,511     64,718     66,335     66,733
Certain board and lodging allowances paid to players on sports teams or members of recreation
programs
Income exclusion (max. per month)                           -               -          -          -          313        315
Tradesperson’s tools deduction
Threshold amount relating to cost of eligible tools         -               -          -          -         1,044      1,051
Goods and services tax credit (GSTC)
Adult maximum                                                     227       232        237        242        248        250
Child maximum                                                     120       122        125        127        130        131
Single supplement                                                 120       122        125        127        130        131
Phase-in threshold for the single supplement                     7,377     7,539      7,705      7,851      8,047      8,096
Family net income at which credit begins to phase out           29,618    30,270     30,936     31,524     32,312     32,506
Canada Child Tax Benefit
Base benefit                                                     1,228     1,255      1,283      1,307      1,340      1,348
Additional benefit for third child                                 86           88         90         91         93         94

                                                                  243       249        -          -          -          -
Additional benefit for children under 7 years
Family net income at which base benefit begins to
                                                                35,595    36,378     37,178     37,885     40,726     40,970
phase out


                                                           27
National Child Benefit (NCB) supplement
First child                                                 1,722    1,945    1,988    2,025   2,076     2,088
Second child                                                1,502    1,720    1,758    1,792   1,837     1,848
Third child                                                 1,420    1,637    1,673    1,704   1,747     1,758
Family net income at which NCB supplement begins to
                                                       -              -      20,883   21,287   23,710   23,855
phase out
Family net income at which NCB supplement phase-
                                                           35,595   36,378   37,178   37,885   40,726   40,970
out is complete
Canada Disability Benefit (CDB)
Maximum benefit                                             2,000    2,300    2,351    2,395   2,455     2,470
Family net income at which CDB supplement begins to
                                                           35,595   36,378   37,178   37,885   40,726   40,970
phase out
Children’s Special Allowances (CSA)
CSA Base Amount                                        -              -       3,271    3,332   3,416     3,436




The GST/HST rates are as follows:
On or after January 1, 2008
GST rate is 5%
HST rate is 13% (5% federal part and 8% provincial part)
Before January 1, 2008 and after June 30, 2006
GST rate was 6%
HST rate was 14% (6% federal part and 8% provincial part)
Before July 1, 2006 and after December 31, 1990
GST rate was 7%
Before July 1, 2006 and after March 31, 1997
HST rate was 15% (7% federal part and 8% provincial part)




                                                      28
                       EI premium rates and maximums 1996-2010
       Max. Insurable Earnings   Max. Annual Insurable   Rate   Max. Annual Employee   Max. Annual Employer
Year
               Weekly                  Earnings          (%)          Premium                Premium
2010            N/A                    $43,200           1.73         $747.36               $1,046.51
2009            N/A                    $42,300           1.73         $731.79               $1,024.51
2008            N/A                    $41,100           1.73         $711.03                $995.44
2007            N/A                    $40,000           1.80         $720.00               $1,008.00
2006            N/A                    $39,000           1.87         $729.30               $1,021.02
2005            N/A                    $39,000           1.95         $760.50               $1,064.70
2004            N/A                    $39,000           1.98         $772.20               $1,081.08
2003            N/A                    $39,000           2.10         $819.00               $1,146.60
2002            N/A                    $39,000           2.20         $858.00               $1,201.20
2001            N/A                    $39,000           2.25         $877.50               $1,228.50
2000            N/A                    $39,000           2.40         $936.00               $1,310.49
1999            N/A                    $39,000           2.55         $994.50               $1,392.30
1998            N/A                    $39,000           2.70        $1,053.00              $1,474.20
1997            N/A                    $39,000           2.90        $1,131.00              $1,583.40
1996            $750                   $39,000           2.95        $1,150.50              $1,610.70

Important Note
For 2009, EI premium rates for Quebec will be 1.38% for employees and 1.93%
for employers. Quebec offers its own parental benefits. For more information,
visit the Revenue Québec site.


                       CPP contribution rates, maximums and exemptions
        Max.                                                    Max. Annual
                            Maximum      Employee Max. Annual
       Annual      Basic                                           Self -
Year                       Contributory Contribution Employee
     Pensionable Exemption                                       Employed
                            Earnings     Rate (%) Contribution
      Earnings                                                  Contribution
2010   $47,200      $3,500    $43,700       4.95      $2,163.15   $4,326.30
2009 $46,300       $3,500    $42,800       4.95      $2,118.60   $4,237.20
2008 $44,900       $3,500    $41,400       4.95      $2,049.30   $4,098.60
2007 $43,700       $3,500    $40,200       4.95      $1,989.90   $3,979.80
2006 $42,100       $3,500    $38,600       4.95      $1,910.70   $3,821.40
2005 $41,100       $3,500    $37,600       4.95      $1,861.20   $3,722.40
2004 $40,500       $3,500    $37,000       4.95      $1,831.50   $3,663.00
2003 $39,900       $3,500    $36,400       4.95      $1,801.80   $3,603.60
2002 $39,100       $3,500    $35,600       4.70      $1,673.20   $3,346.40
2001 $38,300       $3,500    $34,800       4.30      $1,496.40   $2,992.80
2000 $37,600       $3,500    $34,100       3.90      $1,329.90   $2,373.00
1999 $37,400       $3,500    $33,900       3.50      $1,186.50   $2,373.00
1998 $36,900       $3,500    $33,400       3.20      $1,068.80   $2,137.60
1997 $35,800       $3,500    $32,300      2.925*      $944.78    $1,889.55
* For 1997, the CPP rate was adjusted to 3.0% with a payment on filing the T1
tax return (max. $969).
                                                         29
Meal and vehicle rates used to calculate travel expenses for 2007
Meal expenses
If you choose the detailed method to calculate meal expenses, you have to keep
your receipts. If you choose the simplified method, you may claim a flat rate
of $17 a meal, to a maximum of $51 per day, per person, without receipts.
Vehicle expenses
If you choose the detailed method to calculate vehicle expenses, you must keep
all receipts and records for the vehicle expenses you incurred for moving
expenses or for northern residents deductions during the tax year; or during the
12-month period you choose for medical expenses.
Vehicle expenses include:
     Operating expenses such as fuel, oil, tires, license fees, insurance,
       maintenance, and repairs.
     Ownership expenses such as depreciation, provincial tax, and finance
       charges.
You also have to keep track of the number of kilometers you drove in that time
period, as well as the number of kilometers you drove specifically for the
purpose of moving or medical expenses, or for the northern residents'
deductions. Your claim for vehicle expenses is the percentage of your total
vehicle expenses that relate to the kilometers driven for moving or medical
expenses, or for northern residents' deductions.
For example, if you drove 10,000 km during the year, and half of that was
related to your move, you can claim half of the total vehicle expenses on your
tax return.
If you choose the simplified method of calculating vehicle expenses, you do not
need to keep receipts. Instead, you must keep track of the number of kilometers
driven during the tax year for your trips relating to northern residents deductions
and moving expenses, or the 12-month period you choose for medical expenses.
To determine the amount you can claim for vehicle expenses, multiply the
number of kilometers by the cents/km rate from the chart below for the province
or territory in which the travel begins.

           Province or territory   Cents/kilometer       Province or territory   Cents/kilometer
Alberta                                 48.0         Nunavut                          56.5
British Columbia                        48.0         Ontario                          49.5
Manitoba                                46.5         Prince Edward Island             47.0
New Brunswick                           47.0         Quebec                           52.5
Newfoundland and Labrador               50.5         Saskatchewan                     46.0
Northwest Territories                   56.5         Yukon                            58.0
Nova Scotia                             48.0                        -                   -




                                               30
Example
In 2009, you provided your employee with an automobile. She drove 30,000
kilometres during the year, with 10,000 kilometres for personal use.

You paid $3,000 in costs associated with maintenance, licences, and insurance.

Calculate the part of the operating expenses that relates to her personal use of
the automobile as follows:

10,000 km ÷ 30,000 km × $3,000 = $1,000

If she reimbursed you for the total amount of $1,000 in the year or no later
than 45 days after the end of the year, you do not have to calculate an operating
expense benefit for her.

However, if she reimbursed you for only $800 of the expenses you paid in the
year or no later than 45 days after the end of the year, the operating expense
benefit is $1,600, calculated as follows:

10,000 km × 24¢ = $2,400

$2,400 - $800 = $1,600



Flat-rate allowance

If you pay your employee an allowance based on a flat rate that is not related to
the number of kilometres driven, it is a taxable benefit and has to be included in
the employee's income.

Combination of flat-rate and reasonable per-kilometre allowances

If you pay your employee an allowance that is a combination of flat-rate and
reasonable per-kilometre allowances that cover the same use for the vehicle, the
total combined allowance is a taxable benefit and has to be included in the
employee's income.

Example 1


You pay an allowance to your employee as follows:

      a flat per-diem rate to offset the employee's fixed expenses for each day
       the vehicle is required; and
                                        31
      A reasonable per-kilometre rate for each kilometre driven to offset the
       operating expenses.

The flat per-diem rate compensates the employee for some of the ―same use‖ on
which the reasonable per-kilometre allowance is based, that is, the fixed
expenses incurred by the employee to operate the vehicle.

The combined amount is considered one allowance and therefore taxable, since
it is not based solely on the number of kilometres the vehicle is used for
employment purposes.

Example 2


You pay an allowance to your employee as follows:

      a flat-rate per month for travel inside the employment district; and
      a reasonable per-kilometre rate for employment-related travel outside the
       employment district.

Since the flat-rate allowance does not cover any of the same use of the vehicle
on which the reasonable per-kilometre allowance is based, the allowances are
considered separately.

The reasonable per-kilometer allowance paid for travel outside the district is
not included in income. The amount based on a flat-rate paid for travel inside
the district is taxable, since it is not based solely on the number of kilometres
for which the vehicle is used in connection with the employment.

Only the total of the monthly flat-rate allowance has to be reported in box 14,
―Employment income‖, and in the ―Other information‖ area under code 40 at
the bottom of the employee's T4 slip.

Example of calculating the taxable benefit


Farzaneh is your employee. He borrowed $150,000 from you at the beginning
of the year. The prescribed rate of interest for the loan is 3% for the first quarter,
4% for the second and third quarters, and 5% for the fourth quarter. Farzaneh
paid you $2,000 interest on the loan no later than 30 days after the end of the
year. During the year, a company related to you paid $1,000 interest on the loan
for Farzaneh. Before the end of the same year, Farzaneh repaid the $1,000 to the
company.


                                         32
Calculate the benefit to include in his income as follows:

1) Prescribed rate × loan amount for the year:
    3% × $150,000 × 1/4 = $1,125
    4% × $150,000 × 2/4 = $3,000
    5% × $150,000 × 1/4 = $1,875                                           $6,000
plus
2) Amount paid by a third party                                             1,000
                                                                           $7,000
minus
3) Interest paid ($2,000 + $1,000) =                         ($3,000)
4) Amount Joshua repaid                                       (1,000)     (4,000)
Farzaneh's taxable benefit                                                $3,000




                   Prescribed Interest Rates for Leasing Rules
Month             2000 2001 2002 2003 2004 2005 2006 2007 2008          2009 2010
January           7.12 6.63 6.66 6.55 6.24 5.87 5.20 5.03 5.22          5.00   4.84
February          7.25 6.59 6.75 6.37 6.14 5.86 5.04 5.11 5.18          4.45   4.84
March             7.36 6.71 6.72 6.45 6.15 5.69 5.22 5.23 5.17          4.74   4.84
April             6.98 6.63 6.68 6.39 5.98 5.71 5.17 5.10 5.14          4.70
May               6.96 6.74 7.00 6.52 5.94 5.75 5.26 5.21 4.91          4.63
June              7.03 6.94 6.89 6.34 6.23 5.55 5.59 5.21 5.02          4.72
July              6.94 7.08 6.76 6.01 6.23 5.41 5.51 5.43 5.07          5.11
August            6.90 6.97 6.73 5.98 6.30 5.27 5.69 5.59 5.07          4.96
September         6.83 7.01 6.70 6.35 6.29 5.31 5.46 5.52 5.18          5.10
October           6.79 6.72 6.55 6.40 6.14 5.11 5.22 5.44 5.02          4.96
November          6.83 6.86 6.38 6.19 6.02 5.21 5.08 5.50 5.14          4.87
December          6.79 6.32 6.61 6.33 5.96 5.38 5.25 5.39 5.31          4.98




                                        33
                         Comparison Federal Personal Income Tax Rates
                    2010 Marginal Tax Rates                           2009 Marginal Tax Rates
                                   Canadian                                          Canadian
  2010 Taxable                     Dividends      2009 Taxable                       Dividends
                Other Capital                                     Other Capital
      Income                                          Income
               Income Gains Eligible Small                       Income Gains Eligible Small
                                        Business                                          Business
                              Dividends                                         Dividends
                                        Dividends                                         Dividends
first $40,970  15.00% 7.50% -4.28%       2.08%     first $40,726 15.00% 7.50% -5.75%       2.08%
over $40,970 up                                       over $40,726 up
                22.00% 11.00% 5.80%         10.83%                    22.00% 11.00% 4.40%        10.83%
to $81,941                                              to $81,452

over $81,941 up                                       over $81,452 up
                26.00% 13.00% 11.56%        15.83%                    26.00% 13.00% 10.20%       15.83%
to $127,021                                             to $126,264

over $127,021     29.00% 14.50% 15.88%      19.58%        over $126,264 29.00% 14.50% 14.55%     19.58%
Marginal tax rate for dividends is a % of actual dividends received (not grossed-up amount).
                          Federal Basic Personal Amount
     2010                      Tax Rate                      2009                     Tax Rate
   $10,382                      15.00%                      $10,320                   15.00%
       Source: www. taxtip.ca


       The tax rate tables show the combined federal plus provincial/territorial
       marginal tax rate for 4 different types of income - the 2 types of Canadian
       dividends, capital gains, and all other income. The other income column
       shows the actual tax rates for each tax bracket. A person's marginal tax rate is
       the tax rate that will be applied to the next dollar earned.

       The marginal tax rates on capital gains and Canadian dividend income are lower
       than on other types of income, because:

            only 50% of capital gains are included in taxable income
            Either 125% or 145% of Canadian dividends are included in taxable
           income, but a dividend tax credit is deducted from taxes payable. See the
           Dividend Tax Credit page for more information.

       Other income includes income from employment, self-employment, interest
       from Canadian or foreign sources, foreign dividend income, etc.

       With some marginal tax rate tables, the marginal tax rate at $60,000 for
       dividends is the rate that would apply if there was no income besides dividend
       income. This is not the way our tax rate tables work.

       In our tables, the marginal tax rates for capital gains and dividends at any
       income level (say $60,000) are the marginal rates on the next dollar of actual

                                                     34
capital gains or actual dividend income, if the taxpayer has $60,000 of taxable
income from sources other than dividends.

Example: the combined federal/BC marginal tax rate for a person earning
$72,000 of employment income in 2009 would be :

         32.5% for employment income
         16.25% for capital gains
         3.68% for eligible Canadian dividends
         18.71% for Canadian small business dividends

Canada Pension Plan (CPP) and Québec Pension Plan (QPP) contribution rates
                Year               2010       2009        2008      2007      2006      2005      2004

maximum pensionable earnings       $47,200   $46,300      $44,900   $43,700   $42,100   $41,100   $40,500

basic exemption                     $3,500    $3,500       $3,500    $3,500    $3,500    $3,500    $3,500

rate                                4.95%      4.95%       4.95%     4.95%     4.95%     4.95%     4.95%

employee/employer maximum        $2,163.15 $2,118.60 $2,049.30 $1,989.90 $1,910.70 $1,861.20 $1,831.50

self-employed maximum            $4,326.30 $4,237.20 $4,098.60 $3,979.80 $3,821.40 $3,722.40 $3,663.00

Source: www. taxtip.ca


Canada Revenue Agency (CRA) information:

        T4032 Payroll Deduction Tables - for calculating payroll deductions

        CPP contribution rates, maximums and exemptions for rates from earlier years.

        Online payroll calculator, which employers can use for calculating payroll deductions,
         and employees can use to check their payroll deductions.


Revenue Québec information:

        Source deductions of Québec income tax - for calculating payroll deductions

        TP-1015.G-V - Guide for Employers: Source Deductions and Contributions




                                                     35
                              Federal & Provincial/Territorial enhanced dividend tax credit rates
                                2007 to 2012 Enhanced Dividend Tax Credit Rates as a % of Grossed-up Taxable Dividends

Year    Gross up    Federal    AB        BC        MB        NB        NL        NS        NT       NU       ON           PE       QC       SK       YT

2012         38%    15.02%     10%      9.76%     11%      10.65%    8.65%     7.85%     10.20%    5.51%     6.4%        9.32%    11.9%     11%     9.76%


2011         41%    16.44%     10%     10.31%     11%      11.24%    9.14%     8.29%     10.78%    5.82%     6.4%        9.84%    11.9%     11%     10.31%


2010         44%    17.97%     10%     10.83%     11%      11.82%    9.60%     8.71%     11.32%    6.11%     6.4%        10.34%   11.9%     11%     10.83%


2009         45%    18.97%     10%      11%       11%       12%      9.75%     8.85%     11.5%     6.21%     7.4%        10.5%    11.9%     11%      11%


2008         45%    18.97%    9.0%      12%       11%       12%      6.65%     8.85%     11.5%     6.20%     7.0%        10.5%    11.9%     11%      11%


2007         45%    18.97%    8.0%      12%       11%       12%      6.65%     8.85%     11.5%     6.20%     6.7%        10.5%              11%      11%
                                                                                                                                  11.9%




                          2007 to 2012 Enhanced Dividend Tax Credit Rates as a % of Actual Dividends



 Year    Gross up   Federal    AB        BC        MB        NB        NL        NS        NT       NU       ON           PE       QC       SK       YT

 2012        38%    20.73%    13.8%    13.47%    15.18%    14.69%    11.94%    10.84%    14.08%    7.60%    8.83%        12.86%   16.42%   15.18%   13.47%


 2011        41%    23.17%    14.1%    14.53%    15.51%    15.85%    12.88%    11.69%    15.19%    8.20%    9.02%        13.87%   16.78%   15.51%   14.53%


 2010        44%    25.88%    14.4%    15.60%    15.84%    17.01%    13.82%    12.55%    16.30%    8.80%    9.22%        14.89%   17.14%   15.84%   15.60%


 2009        45%    27.50%    14.5%    15.95%    15.95%    17.40%    14.14%    12.83%    16.68%    9.00%    10.73%       15.23%   17.26%   15.95%   15.95%


 2008        45%    27.50%    13.05%   17.40%    15.95%    17.40%    9.64%     12.83%    16.68%    8.99%    10.15%       15.23%   17.26%   15.95%   15.95%


 2007        45%    27.50%    11.60%   17.40%    15.95%    17.40%    9.64%     12.83%    16.68%    8.99%    9.72%        15.23%   17.26%   15.95%   15.95%



          Rates are as known at December 22, 2009. (Source: taxtip.ca)




                                                                         36
Rates for Money Purchase limits, RRSP limits, YMPE, DPSP limits
and Defined Benefits limits
Outlined in the following tables are data on Rates for Money Purchase limits,
RRSP limits, YMPE, DPSP limits and Defined Benefits limits used to calculate
PA, PSPA and PAR.

   Year                 MP limit          RRSP $ limit YMPE          DPSP limit
                                                                     (1/2 MP limit)
   1990                 $11,500           (Old limits)     $28,900   $5,750
   1991                 $12,500           $11,500          $30,500   $6,250
   1992                 $12,500           $12,500          $32,200   $6,250
   1993                 $13,500           $12,500          $33,400   $6,750
   1994                 $14,500           $13,500          $34,400   $7,250
   1995                 $15,500           $14,500          $34,900   $7,750
   1996                 $13,500           $13,500          $35,400   $6,750
   1997                 $13,500           $13,500          $35,800   $6,750
   1998                 $13,500           $13,500          $36,900   $6,750
   1999                 $13,500           $13,500          $37,400   $6,750
   2000                 $13,500           $13,500          $37,600   $6,750
   2001                 $13,500           $13,500          $38,300   $6,750
   2002                 $13,500           $13,500          $39,100   $6,750
   2003                 $15,500           $14,500          $39,900   $7,750
   2004                 $16,500           $15,500          $40,500   $8,250
   2005                 $18,000           $16,500          $41,100   $9,000
   2006                 $19,000           $18,000          $42,100   $9,500
   2007                 $20,000           $19,000          $43,700   $10,000
   2008                 $21,000           $20,000          $44,900   $10,500
   2009                 $22,000           $21,000          $46,300   $11,000
   2010                 $22,450           $22,000          $47,200   $11,225
   2011                 $22,450 (*)       $22,450
   2012                                   $22,450 (***)
                  * increased by increases in the Average Wage

Please note that the MP limit and DPSP limit above for PA purposes are also
restricted to 18% of compensation.

                         Defined Benefit limits
   1990 to 2003                          $1,722.22
   2004                                  $1,833.33
   2005                                  $2,000.00
   2006                                  $2,111.11
   2007                                  $2,222.22
   2008                                  $2,333.33
   2009                                  $2,444.44
   2010                                  $2,494.44
   2011                                  1/9 the money purchase limit


                                         37
        What are the income tax rates in Canada for
        2010?
        These are the rates that an individual will use when completing their 2010

        income tax and benefit return. The information may change during the year to

        reflect updates to the law.

        Federal tax rates for 2010 are:

                   15% on the first $40,970 of taxable income, +
                   22% on the next $40,971 of taxable income (on the portion of taxable
                    income between $40,970 and $81,941), +
                   26% on the next $45,080 of taxable income (on the portion of taxable
                    income between $81,941 and $127,021), +
                   29% of taxable income over $127,021.
              
        The chart below reproduces the first calculation that has to be made on Page 2
        of Schedule 1 of the tax package to calculate net federal tax. Page 1 is used to
        calculate federal non-refundable tax credits.

                               Federal tax on taxable income manual calculation chart 2010
                                    Use this
                                  column if     Use this column if your   Use this column if your    Use this column if
                                 your taxable   taxable income is more    taxable income is more    your taxable income
                                   income is     than $40,970, but not     than $81,941, but not          is more
                                  $40,970 or      more than $81,941         more than $127,021         than $127,021
                                      less
Enter your taxable income
                                                                                                                          1
from line 260 of your return
Base amount                     −    0          −   40,971                −   86,051                − 127,021             2
Line 1 minus line 2 (this
                                =               =                         =                         =                     3
amount cannot be negative)
Federal tax rate                ×   15%         ×   22%                   ×    26%                  ×    29%              4
Multiply the amount on line
                            =                   =                         =                         =                     5
3 by the tax rate on line 4
Tax on the amount from
                                +    0          +   6,109                 +   15,069                +   26,720            6
line 2
Add lines 5 and 6               =               =                         =                         =                     7



                                                              38
Provincial/Territorial tax rates for 2010
Under the current tax on income method, tax for all provinces (except Quebec)
and territories is calculated the same way as federal tax.
Form 428 is used to calculate this provincial or territorial tax. Provincial or
territorial specific non-refundable tax credits are also calculated on Form 428.
For complete details, see the Provincial or Territorial information and forms in
your 2009 tax package.

                  Provincial / Territorial tax rates (combined chart) 2010
  Provinces / Territories                                 Rate(s)
Newfoundland and Labrador 7.7% on the first $31,061 of taxable income, +
                               12.8% on the next $31,060, +
                               15.5% on the amount over $62,121
Prince Edward Island           9.8% on the first $31,984 of taxable income, +
                               13.8% on the next $31,985, +
                               16.7% on the amount over $63,969
Nova Scotia                    8.79% on the first $29,590 of taxable income, +
                               14.95% on the next $29,590, +
                               16.67% on the next $33,820 +
                               17.5% on the amount over $93,000
New Brunswick                  10.12% on the first $35,707 of taxable income, +
                               15.48% on the next $35,708, +
                               16.8% on the next $44,690, +
                               17.95% on the amount over $116,105
Quebec                         Contact Revenue Québec
Ontario                        6.05% on the first $36,848 of taxable income, +
                               9.15% on the next $36,850, +
                               11.16% on the amount over $73,698
Manitoba                       10.8% on the first $31,000 of taxable income, +
                               12.75% on the next $36,000, +
                               17.4% on the amount over $67,000
Saskatchewan                   11% on the first $40,113 of taxable income, +
                               13% on the next $74,497, +
                               15% on the amount over $114,610
Alberta                        10% of taxable income
British Columbia               5.06% on the first $35,716 of taxable income, +
                               7.7% on the next $35,717, +
                               10.5% on the next $10,581, +
                               12.29% on the next $17,574, +
                               14.7% on the amount over $99,588
Yukon                          7.04% on the first $38,832 of taxable income, +
                               9.68% on the next $38,832, +
                               11.44% on the next $48,600, +
                               12.76% on the amount over $126,264
Northwest Territories          5.9% on the first $36,885 of taxable income, +
                               8.6% on the next $36,887, +
                               12.2% on the next $46,164, +
                               14.05% on the amount over $119,936
Nunavut                        4% on the first $38,832 of taxable income, +
                               7% on the next $38,832, +
                               9% on the next $48,600, +
                               11.5% on the amount over $126,264


                                            39
        What are the income tax rates in Canada for
        2009?
        These are the rates that an individual will use when completing their 2009
        income tax and benefit return. The information may change during the year to
        reflect updates to the law.

        Federal tax rates for 2009 are:
             15% on the first $40,726 of taxable income, +
             22% on the next $40,726 of taxable income (on the portion of taxable
              income between $40,726 and $81,452), +
             26% on the next $44,812 of taxable income (on the portion of taxable
              income between $81,452 and $126,264), +
             29% of taxable income over $126,264.
        The chart below reproduces the first calculation that has to be made on Page 2
        of Schedule 1 of the tax package to calculate net federal tax. Page 1 is used to
        calculate federal non-refundable tax credits.


                               Federal tax on taxable income manual calculation chart 2009
                                Use this
                                column if      Use this column if your   Use this column if your   Use this column if
                                your taxable   taxable income is more    taxable income is more    your taxable income
                                income is      than $40,726, but not     than $81,452, but not     is more
                                $40,726 or     more than $81,452         more than $126,264        than $126,264
                                less
Enter your taxable income
                                                                                                                         1
from line 260 of your return
Base amount                     −    0         −   40,726                −   81,452                − 126,264             2
Line 1 minus line 2 (this
                                =              =                         =                         =                     3
amount cannot be negative)
Federal tax rate                ×   15%        ×   22%                   ×    26%                  ×    29%              4
Multiply the amount on line
                            =                  =                         =                         =                     5
3 by the tax rate on line 4
Tax on the amount from
                                +    0         +   6,109                 +   15,069                +   26,720            6
line 2
Add lines 5 and 6               =              =                         =                         =                     7


        Provincial/Territorial tax rates for 2009
        Under the current tax on income method, tax for all provinces (except Quebec)
        and territories is calculated the same way as federal tax.
        Form 428 is used to calculate this provincial or territorial tax. Provincial or
        territorial specific non-refundable tax credits are also calculated on Form 428.

                                                              40
For complete details, see the Provincial or Territorial information and forms in
your 2009 tax package.

                 Provincial / Territorial tax rates (combined chart) 2009
  Provinces / Territories                                Rate(s)
Newfoundland and Labrador 7.7% on the first $31,061 of taxable income, +
                          12.8% on the next $31,060, +
                          15.5% on the amount over $62,121
Prince Edward Island         9.8% on the first $31,984 of taxable income, +
                             13.8% on the next $31,985, +
                             16.7% on the amount over $63,969
Nova Scotia                  8.79% on the first $29,590 of taxable income, +
                             14.95% on the next $29,590, +
                             16.67% on the next $33,820 +
                             17.5% on the amount over $93,000
New Brunswick                10.12% on the first $35,707 of taxable income, +
                             15.48% on the next $35,708, +
                             16.8% on the next $44,690, +
                             17.95% on the amount over $116,105
Quebec                       Contact Revenu Québec
Ontario                      6.05% on the first $36,848 of taxable income, +
                             9.15% on the next $36,850, +
                             11.16% on the amount over $73,698
Manitoba                     10.8% on the first $31,000 of taxable income, +
                             12.75% on the next $36,000, +
                             17.4% on the amount over $67,000
Saskatchewan                 11% on the first $40,113 of taxable income, +
                             13% on the next $74,497, +
                             15% on the amount over $114,610
Alberta                      10% of taxable income
British Columbia             5.06% on the first $35,716 of taxable income, +
                             7.7% on the next $35,717, +
                             10.5% on the next $10,581, +
                             12.29% on the next $17,574, +
                             14.7% on the amount over $99,588
Yukon                        7.04% on the first $38,832 of taxable income, +
                             9.68% on the next $38,832, +
                             11.44% on the next $48,600, +
                             12.76% on the amount over $126,264
Northwest Territories        5.9% on the first $36,885 of taxable income, +
                             8.6% on the next $36,887, +
                             12.2% on the next $46,164, +
                             14.05% on the amount over $119,936
Nunavut                      4% on the first $38,832 of taxable income, +
                             7% on the next $38,832, +
                             9% on the next $48,600, +
                             11.5% on the amount over $126,264




                                            41
What are the income tax rates in Canada for
2008?
These are the rates that an individual will use when completing their 2008
income tax and benefit return. The information may change during the year to
reflect updates to the law.
Federal tax rates for 2008 are:
     15% on the first $37,885 of taxable income, +
     22% on the next $37,884 of taxable income (on the portion of taxable
       income between $37,885 and $75,769), +
     26% on the next $47,415 of taxable income (on the portion of taxable
       income between $75,769 and $123,184), +
     29% of taxable income over $123,184.
The chart below reproduces the first calculation that has to be made on Page 2
of Schedule 1 of the tax package to calculate net federal tax. Page 1 is used to
calculate federal non-refundable tax credits.

                         Federal tax on taxable income manual calculation chart 2008
                         Use this     Use this column if     Use this column if
                                                                                  Use this column if
                     column if your your taxable income is your taxable income is
                                                                                     your taxable
                     taxable income  more than $37,885,     more than $75,769,
                                                                                   income is more
                      is $37,885 or   but not more than      but not more than
                                                                                    than $123,184
                           less            $75,769                $123,184
Enter your taxable
income from line                                                                                       1
260 of your return
Base amount          −      0         −   37,885             −   75,769                − 123,184       2
Line 1 minus line
2 (this amount
                     =                =                      =                         =               3
cannot be
negative)
Federal tax rate     ×    15%         ×    22%               ×    26%                  ×    29%        4
Multiply the
amount on line 3
                     =                =                      =                         =               5
by the tax rate on
line 4
Tax on the amount
                  +        0          +    5,683             +   14,017                +   26,345      6
from line 2
Add lines 5 and 6    =                =                      =                         =               7


Provincial/Territorial tax rates for 2008
Under the current tax on income method, tax for all provinces (except Quebec)
and territories is calculated the same way as federal tax.
Form 428 is used to calculate this provincial or territorial tax. Provincial or territorial specific
non-refundable tax credits are also calculated on Form 428.

                                                    42
   For complete details, see the Provincial or Territorial information and forms in your 2008
   tax package.

                        Provincial / Territorial tax rates (combined chart) 2008
  Provinces / Territories                                      Rate(s)
Newfoundland and Labrador 8.2% on the first $30,215 of taxable income, +
                          13.3% on the next $30,214, +
                          16% on the amount over $60,429
Prince Edward Island           9.8% on the first $31,984 of taxable income, +
                               13.8% on the next $31,985, +
                               16.7% on the amount over $63,969
Nova Scotia                    8.79% on the first $29,590 of taxable income, +
                               14.95% on the next $29,590, +
                               16.67% on the next $33,820 +
                               17.5% on the amount over $93,000
New Brunswick                  10.12% on the first $34,836 of taxable income, +
                               15.48% on the next $34,837, +
                               16.8% on the next $43,600, +
                               17.95% on the amount over $113,273
Ontario                        6.05% on the first $36,020 of taxable income, +
                               9.15% on the next $36,021, +
                               11.16% on the amount over $72,041
Manitoba                       10.9% on the first $30,544 of taxable income, +
                               12.75% on the next $35,456, +
                               17.4% on the amount over $66,000
Saskatchewan                   11% on the first $39,135 of taxable income, +
                               13% on the next $72,679, +
                               15% on the amount over $111,814
Alberta                        10% of taxable income
British Columbia               5.06% on the first $35,016 of taxable income, +
                               7.7% on the next $35,017, +
                               10.5% on the next $10,373, +
                               12.29% on the next $17,230, +
                               14.7% on the amount over $97,636
Yukon                          7.04% on the first $37,885 of taxable income, +
                               9.68% on the next $37,884, +
                               11.44% on the next $47,415, +
                               12.76% on the amount over $123,184
Northwest Territories          5.9% on the first $35,986 of taxable income, +
                               8.6% on the next $35,987, +
                               12.2% on the next $45,038, +
                               14.05% on the amount over $117,011
Nunavut                        4% on the first $37,885 of taxable income, +
                               7% on the next $37,884, +
                               9% on the next $47,415, +
                               11.5% on the amount over $123,184




                                                  43
   What are the income tax rates in Canada for
   2007?
   Federal tax rates for 2007 are:
        15% on the first $37,178 of taxable income, +
        22% on the next $37,179 of taxable income (on the portion of taxable
         income between $37,178 and $74,357), +
        26% on the next $46,530 of taxable income (on the portion of taxable
         income between $74,357 and $120,887), +
        29% of taxable income over $120,887.
   The chart below reproduces the first calculation that has to be made on Page 2
   of Schedule 1 of the tax package to calculate net federal tax. Page 1 is used to
   calculate federal non-refundable tax credits.

                       Federal tax on taxable income manual calculation chart 2007
                        Use this
                                       Use this column if
                        column if                               Use this column if your   Use this column if
                                       your taxable income is
                        your taxable                            taxable income is more    your taxable
                                       more than $37,178,
                        income is                               than $74,357, but not     income is more
                                       but not more
                        $37,178 or                              more than $120,887        than $120,887
                                       than $74,357
                        less
Enter your taxable
income from line 260                                                                                           1
of your return
Base amount             −    0         −   37,178               −   74,357                − 120,887            2
Line 1 minus line 2
(this amount cannot     =              =                        =                         =                    3
be negative)
Federal tax rate        ×   15%        ×   22%                  ×    26%                  ×    29%             4
Multiply the amount
on line 3 by the tax    =              =                        =                         =                    5
rate on line 4
Tax on the amount
                        +    0         +   5,577                +   13,756                +   25,854           6
from line 2
Add lines 5 and 6       =              =                        =                         =                    7


   Provincial/Territorial tax rates for 2007
   Under the current tax on income method, tax for all provinces (except Quebec)
   and territories is calculated the same way as federal tax.
   Form 428 is used to calculate this provincial or territorial tax. Provincial or
   territorial specific non-refundable tax credits are also calculated on Form 428.
   For complete details, see the Provincial or Territorial information and forms in
   your 2007 tax package.


                                                      44
                    Provincial / Territorial tax rates (combined chart) 2007
  Provinces / Territories                                  Rate(s)
Newfoundland and Labrador 9.64% on the first $29,886 of taxable income, +
                          14.98% on the next $29,886, +
                          17.26% on the amount over $59,772
Prince Edward Island         9.8% on the first $31,369 of taxable income, +
                             13.8% on the next $31,370, +
                             16.7% on the amount over $62,739
Nova Scotia                  8.79% on the first $29,590 of taxable income, +
                             14.95% on the next $29,590, +
                             16.67% on the next $33,820 +
                             17.5% on the amount over $93,000
New Brunswick                10.12% on the first $34,186 of taxable income, +
                             15.48% on the next $34,188, +
                             16.8% on the next $42,787, +
                             17.95% on the amount over $111,161
Ontario                      6.05% on the first $35,488 of taxable income, +
                             9.15% on the next $35,488, +
                             11.16% on the amount over $70,976
Manitoba                     10.9% on the first $30,544 of taxable income, +
                             13% on the next $34,456, +
                             17.4% on the amount over $65,000
Saskatchewan                 11% on the first $38,405 of taxable income, +
                             13% on the next $71,324, +
                             15% on the amount over $109,729
Alberta                      10% of taxable income
British Columbia             5.7% on the first $34,397 of taxable income, +
                             8.65% on the next $34,397, +
                             11.1% on the next $10,190, +
                             13% on the next $16,925, +
                             14.7% on the amount over $95,909
Yukon                        7.04% on the first $37,178 of taxable income, +
                             9.68% on the next $37,179, +
                             11.44% on the next $46,530, +
                             12.76% on the amount over $120,887
Northwest Territories        5.9% on the first $35,315 of taxable income, +
                             8.6% on the next $35,316, +
                             12.2% on the next $44,199, +
                             14.05% on the amount over $114,830
Nunavut                      4% on the first $37,178 of taxable income, +
                             7% on the next $37,179, +
                             9% on the next $46,530, +
                             11.5% on the amount over $120,887




                                              45
  What are the income tax rates in Canada for
  2006?
  Federal tax rates for 2006 are:
       15.25% on the first $36,378 of taxable income, plus
       22% on the next $36,378 of taxable income (on the portion of taxable
         income between $36,378 and $72,756), plus
       26% on the next $45,529 of taxable income (on the portion of taxable
         income between $72,756 and $118,285), plus
       29% of taxable income over $118,285.
  The chart below reproduces the first calculation that has to be made on Page 1
  of Schedule 1 of the tax package to calculate net federal tax. Page 1 is also used
  to calculate federal non-refundable tax credits.

                       Federal tax on taxable income manual calculation chart 2006
                                              Use this column if      Use this column if
                         Use this column                                                    Use this column
                                             your taxable income     your taxable income
                          if your taxable                                                   if your taxable
                                            is more than $36,378,   is more than $72,756,
                        income is $36,378                                                   income is more
                                              but not more than       but not more than
                               or less                                                       than $118,285
                                                   $72,756                 $118,285
Enter your taxable
income from line 260                                                                                          1
of your return
Base amount             −    0              −   36,378              −   72,756              − 118,285         2
Line 1 minus line 2
(this amount cannot     =                   =                       =                       =                 3
be negative)
Federal tax rate        ×   15.25%          ×   22%                 ×    26%                ×    29%          4
Multiply the amount
on line 3 by the tax    =                   =                       =                       =                 5
rate on line 4
Tax on the amount
                        +    0              +   5,548               +   13,551              +   25,388        6
from line 2
Add lines 5 and 6       =                   =                       =                       =                 7
  Provincial/Territorial tax rates for 2006
  Under the current tax on income method, tax for all provinces (except Quebec)
  and territories is calculated the same way as federal tax.
  Form 428 is used to calculate this provincial or territorial tax. Provincial or
  territorial specific non-refundable tax credits are also calculated on Form 428.
  For complete details, see the Provincial or Territorial information and forms in
  your 2006 tax package.




                                                         46
                   Provincial / Territorial tax rates (combined chart) 2006
  Provinces / Territories                                   Rate(s)
Newfoundland and Labrador 10.57% on the first $29,590 of taxable income, +
                          16.16% on the next $29,590, +
                          18.02% on the amount over $59,180
Prince Edward Island         9.8% on the first $30,754 of taxable income, +
                             13.8% on the next $30,755, +
                             16.7% on the amount over $61,509
Nova Scotia                  8.79% on the first $29,590 of taxable income, +
                             14.95% on the next $29,590, +
                             16.67% on the next $33,820 +
                             17.5% on the amount over $93,000
New Brunswick                9.68% on the first $33,450 of taxable income, +
                             14.82% on the next $33,452, +
                             16.52% on the next $41,866, +
                             17.84% on the amount over $108,768
Ontario                      6.05% on the first $34,758 of taxable income, +
                             9.15% on the next $34,759, +
                             11.16% on the amount over $69,517
Manitoba                     10.9% on the first $30,544 of taxable income, +
                             13.5% on the next $34,456, +
                             17.4% on the amount over $65,000
Saskatchewan                 11% on the first $37,579 of taxable income, +
                             13% on the next $69,788, +
                             15% on the amount over $107,367
Alberta                      10% of taxable income
British Columbia             6.05% on the first $33,755 of taxable income, +
                             9.15% on the next $33,756, +
                             11.7% on the next $10,000, +
                             13.7% on the next $16,610, +
                             14.7% on the amount over $94,121
Yukon                        7.04% on the first $36,378 of taxable income, +
                             9.68% on the next $36,378, +
                             11.44% on the next $45,529, +
                             12.76% on the amount over $118,285
Northwest Territories        5.9% on the first $34,555 of taxable income, +
                             8.6% on the next $34,555, +
                             12.2% on the next $43,248, +
                             14.05% on the amount over $112,358
Nunavut                      4% on the first $36,378 of taxable income, +
                             7% on the next $36,378, +
                             9% on the next $45,529, +
                             11.5% on the amount over $118,285




                                               47
What are the income tax rates in Canada for
2005?
Federal tax rates for 2005 are:
     15% on the first $35,595 of taxable income;
     22% on the next $35,595 of taxable income;
     26% on the next $44,549 of taxable income; and
     29% of taxable income over $115,739.
The chart below reproduces the first calculation that has to be made on Page 1
of Schedule 1 of the tax package to calculate net federal tax. Page 1 is also used
to calculate federal non-refundable tax credits.

                     Federal tax on taxable income manual calculation chart 2005
                    Use this         Use this column if       Use this column if
                                                                                       Use this column if
                    column if your   your taxable income is   your taxable income is
                                                                                       your taxable
                    taxable income   more than $35,595,       more than $71,190,
                                                                                       income is more
                    is $35,595 or    but not more than        but not more than
                                                                                       than $115,739
                    less             $71,190                  $115,739
Enter your
taxable income
                                                                                                            1
from line 260 of
your return
Base amount         −    0           −   35,595               −   71,190               − 115,739            2
Line 1 minus
line 2 (this
                    =                =                        =                        =                    3
amount cannot
be negative)
Federal tax rate    ×   15%          ×   22%                  ×    26%                 ×    29%             4
Multiply the
amount on line
                    =                =                        =                        =                    5
3 by the tax rate
on line 4
Tax on the
amount from         +    0           +   5,339                +   13,170               +   24,753           6
line 2
Add lines 5 and
                    =                =                        =                        =                    7
6


Provincial/Territorial tax rates for 2005
Under the current tax on income method, provincial tax for all provinces (except
Quebec) and territories is calculated the same way as federal tax.
Form 428 is used to calculate this provincial or territorial tax. Provincial or
territorial specific non-refundable tax credits are also calculated on Form 428.
For complete details, see the Provincial or Territorial information and forms in
your 2005 tax package.

                                                     48
          Provincial / Territorial tax rates (combined chart)2005
  Provinces / Territories                        Rate(s)
Newfoundland and Labrador 10.57% on the first $29,590 of taxable income, +
                          16.16% on the next $29,590, +
                          18.02% on the amount over $59,180
Prince Edward Island        9.8% on the first $30,754 of taxable income, +
                            13.8% on the next $30,755, +
                            16.7% on the amount over $61,509
Nova Scotia                 8.79% on the first $29,590 of taxable income, +
                            14.95% on the next $29,590, +
                            16.67% on the next $33,820, +
                            17.5% on the amount over $93,000
New Brunswick               9.68% on the first $32,730 of taxable income, +
                            14.82% on the next $32,732, +
                            16.52% on the next $40,965, +
                            17.84% on the amount over $106,427
Ontario                     6.05% on the first $34,010 of taxable income, +
                            9.15% on the next $34,010, +
                            11.16% on the amount over $68,020
Manitoba                    10.9% on the first $30,544 of taxable income, +
                            14% on the next $34,456, +
                            17.4% on the amount over $65,000
Saskatchewan                11% on the first $36,770 of taxable income, +
                            13% on the next $68,286, +
                            15% on the amount over $105,056
Alberta                     10% of taxable income
British Columbia            6.05% on the first $33,061 of taxable income, +
                            9.15% on the next $33,062, +
                            11.7% on the next $9,794, +
                            13.7% on the next $16,268, +
                            14.7% on the amount over $92,185
Yukon                       7.04% on the first $35,595 of taxable income, +
                            9.68% on the next $35,595, +
                            11.44% on the next $44,549, +
                            12.76% on the amount over $115,739
Northwest Territories       5.9% on the first $33,811 of taxable income, +
                            8.6% on the next $33,811, +
                            12.2% on the next $42,317, +
                            14.05% on the amount over $109,939
Nunavut                     4% on the first $35,595 of taxable income, +
                            7% on the next $35,595, +
                            9% on the next $44,549, +
                            11.5% on the amount over $115,739




                                    49
What are the income tax rates in Canada for
2004?
Federal tax rates for 2004 are:
     16% on the first $35,000 of taxable income;
     22% on the next $35,000 of taxable income;
     26% on the next $43,804 of taxable income; and
     29% of taxable income over $113,804.
The chart below reproduces the first calculation that has to be made on Page 1
of Schedule 1 of the tax package to calculate net federal tax. Page 1 is also used
to calculate federal non-refundable tax credits.

                     Federal tax on taxable income manual calculation chart 2004
                         Use this     Use this column if     Use this column if
                                                                                  Use this column if
                     column if your your taxable income is your taxable income is
                                                                                     your taxable
                     taxable income  more than $35,000,     more than $70,000,
                                                                                   income is more
                      is $35,000 or   but not more than      but not more than
                                                                                    than $113,804
                           less            $70,000                $113,804
Enter your taxable
income from line                                                                                       1
260 of your return
Base amount          −    0          −   35,000             −   70,000             − 113,804           2
Line 1 minus line
2 (this amount
                     =               =                      =                      =                   3
cannot be
negative)
Federal tax rate     ×   16%         ×   22%                ×    26%               ×    29%            4
Multiply the
amount on line 3
                     =               =                      =                      =                   5
by the tax rate on
line 4
Tax on the amount
                  +       0          +   5,600              +   13,300             +   24,689          6
from line 2
Add lines 5 and 6    =               =                      =                      =                   7


Provincial/Territorial tax rates for 2004
Under the current tax on income method, provincial tax for all provinces (except
Quebec) and territories is calculated the same way as federal tax.
Form 428 is used to calculate this provincial or territorial tax. Provincial or
territorial specific non-refundable tax credits are also calculated on Form 428.
For complete details, see the Provincial information and forms in your 2004 tax
package.



                                                   50
                Provincial / Territorial tax rates (combined chart) 2004
  Provinces / Territories                              Rate(s)
Newfoundland and Labrador 10.57% on the first $29,590 of taxable income, +
                          16.16% on the next $29,590, +
                          18.02% on the amount over $59,180
Prince Edward Island         9.8% on the first $30,754 of taxable income, +
                             13.8% on the next $30,755, +
                             16.7% on the amount over $61,509
Nova Scotia                  8.79% on the first $29,590 of taxable income, +
                             14.95% on the next $29,590, +
                             16.67% on the next $33,820, +
                             17.5% on the amount over $93,000
New Brunswick                9.68% on the first $32,183 of taxable income, +
                             14.82% on the next $32,185, +
                             16.52% on the next $40,280, +
                             17.84% on the amount over $104,648
Ontario                      6.05% on the first $33,375 of taxable income, +
                             9.15% on the next $33,377, +
                             11.16% on the amount over $66,752
Manitoba                     10.9% on the first $30,544 of taxable income, +
                             14% on the next $34,456, +
                             17.4% on the amount over $65,000
Saskatchewan                 11% on the first $36,155 of taxable income, +
                             13% on the next $67,145, +
                             15% on the amount over $103,300
Alberta                      10% of taxable income
British Columbia             6.05% on the first $32,476 of taxable income, +
                             9.15% on the next $32,478, +
                             11.7% on the next $9,621, +
                             13.7% on the next $15,980, +
                             14.7% on the amount over $90,555
Yukon                        7.04% on the first $35,000 of taxable income, +
                             9.68% on the next $35,000, +
                             11.44% on the next $43,804, +
                             12.76% on the amount over $113,804
Northwest Territories        7.2% on the first $33,245 of taxable income, +
                             9.9% on the next $33,247, +
                             11.95% on the next $41,609, +
                             13.55% on the amount over $108,101
Nunavut                      4% on the first $35,000 of taxable income, +
                             7% on the next $35,000, +
                             9% on the next $43,804, +
                             11.5% on the amount over $113,804




                                          51
   What are the income tax rates in Canada for
   2003?
   Federal tax rates for 2003 are:
         16% on the first $32,183 of taxable income;
         22% on the next $32,185 of taxable income;
         26% on the next $40,280 of taxable income; and
         29% of taxable income over $104,648.
   The chart below reproduces the first calculation that has to be made on Page 1
   of Schedule 1 of the tax package to calculate net federal tax. Page 1 is also used
   to calculate federal non-refundable tax credits.

                    Federal tax on taxable income manual calculation chart 2003
                        Use this column if      Use this column if       Use this column      Use this
                           your taxable       your taxable income is     if your taxable     column if
                        income is $32,183    more than $32,183, but not income is more      your taxable
                              or less           more than $64,368       than $64,368, but    income is
                                                                          not more than      more than
                                                                             $104,648         $104,648
Enter your taxable                                                                                         1
income from line 260
of your return
Base amount            −    0                −   32,183                 −   64,368          − 104,648      2
Line 1 minus line 2    =                     =                          =                   =              3
(this amount cannot
be negative)
Federal tax rate       ×   16%               ×   22%                    ×    26%            ×    29%       4
Multiply the amount    =                     =                          =                   =              5
on line 3 by the tax
rate on line 4
Tax on the amount      +    0                +   5,149                  +   12,230          +   22,703     6
from line 2
Add lines 5 and 6      =                     =                          =                   =              7
   The calculation continues on Page 2 of Schedule 1 to determine net federal tax.

   Provincial/territorial tax rates for 2003
   Under the current Tax On Income (TONI) method, provincial tax for all
   provinces (except Quebec) and the three territories is calculated the same way
   as federal tax.
   Form 428 is used to calculate this provincial or territorial tax. Provincial or
   territorial specific non-refundable tax credits are also calculated on Form 428.
   For complete details, see the Provincial information and forms in your 2003 tax
   package.


                                                     52
              Provincial / Territorial tax rates (combined chart) 2003
   Provinces / Territories                            Rate(s)
Newfoundland and Labrador 10.57% on the first $29,590 of taxable income, +
                          16.16% on the next $29,590, +
                          18.02% on the amount over $59,180
Prince Edward Island             9.8% on the first $30,754 of taxable income, +
                                 13.8% on the next $30,755, +
                                 16.7% on the amount over $61,509
Nova Scotia                      9.77% on the first $29,590 of taxable income, +
                                 14.95% on the next $29,590, +
                                 16.67% on the amount over $59,180
New Brunswick                    9.68% on the first $32,183 of taxable income, +
                                 14.82% on the next $32,185, +
                                 16.52% on the next $40,280, +
                                 17.84% on the amount over $104,648
Ontario                          6.05% on the first $32,435 of taxable income, +
                                 9.15% on the next $32,436, +
                                 11.16% on the amount over $64,871
Manitoba                         10.9% on the first $30,544 of taxable income, +
                                 14.9% on the next $34,456, +
                                 17.4% on the amount over $65,000
Saskatchewan                     11% on the first $35,000 of taxable income, +
                                 13% on the next $65,000, +
                                 15% on the amount over $100,000
Alberta                          10% of taxable income
British Columbia                 6.05% on the first $31,653 of taxable income, +
                                 9.15% on the next $31,655, +
                                 11.7% on the next $9,377, +
                                 13.7% on the next $15,575, +
                                 14.7% on the amount over $88,260
Yukon                            7.04% on the first $32,183 of taxable income, +
                                 9.68% on the next $32,185, +
                                 11.44% on the next $40,280, +
                                 12.76% on the amount over $104,648
Northwest Territories            7.2% on the first $32,183 of taxable income, +
                                 9.9% on the next $32,185, +
                                 11.7% on the next $40,280, +
                                 13.05% on the amount over $104,648
Nunavut                          4% on the first $32,183 of taxable income, +
                                 7% on the next $32,185, +
                                 9% on the next $40,280, +
                                 11.5% on the amount over $104,648


                                        53
   What are the income tax rates in Canada for
   2002?
   Federal tax rates for 2002 are:
         16% on the first $31,677 of taxable income;
         22% on the next $31,677 of taxable income;
         26% on the next $39,646 of taxable income; and
         29% of taxable income over $103,000.
   The chart below reproduces the first calculation that has to be made on Page 1
   of Schedule 1 of the tax package to calculate net federal tax. Page 1 is also used
   to calculate federal non-refundable tax credits.


                     Federal tax on taxable income manual calculation chart 2002
                      Use this column if your        Use this column if       Use this column if   Use this
                      taxable income is $31,677 or   your taxable income is   your taxable         column if
                      less                           more than $31,677,       income is more       your
                                                     but not more than        than $63,354, but    taxable
                                                     $63,354                  not more than        income is
                                                                              $103,000             more than
                                                                                                   $103,000
Enter your taxable                                                                                              1
income from line
260 of your return
Base amount           −     0                        −    31,677              −   63,354           − 103,000    2
Line 1 minus line 2 =                                =                        =                    =            3
(this amount
cannot be negative)
Federal tax rate      ×   16%                        ×    22%                 ×    26%             ×    29%     4
Multiply the          =                              =                        =                    =            5
amount on line 3
by the tax rate on
line 4
Tax on the amount     +    0                         +    5,068               +   12,037           +   22,345   6
from line 2
Add lines 5 and 6     =                              =                        =                    =            7
   The calculation continues on Page below of Schedule above to determine net
   federal tax.

   Provincial/Territorial tax rates for 2002
   Under the current Tax On Income (TONI) method, provincial tax for all
   provinces (except Quebec) and the three territories is calculated the same way
   as federal tax.
   Form 428 is used to calculate this provincial or territorial tax. Provincial or
   territorial specific non-refundable tax credits are also calculated on Form 428.
                                                         54
For complete details, see the Provincial information and forms in your 2003 tax
package.

                Provincial / Territorial tax rates (combined chart) 2002
   Provinces / Territories                               Rate(s)
Newfoundland and Labrador 10.57% on the first $29,590 of taxable income, +
                          16.16% on the next $29,590, +
                          18.02% on the amount over $59,180
Prince Edward Island          9.8% on the first $30,754 of taxable income, +
                              13.8% on the next $30,755, +
                              16.7% on the amount over $61,509
Nova Scotia                   9.77% on the first $29,590 of taxable income, +
                              14.95% on the next $29,590, +
                              16.67% on the amount over $59,180
New Brunswick                 9.68% on the first $31,677 of taxable income, +
                              14.82% on the next $31,677, +
                              16.52% on the next $39,646, +
                              17.84% on the amount over $103,000
Ontario                       6.05% on the first $31,893 of taxable income, +
                              9.15% on the next $31,893, +
                              11.16% on the amount over $63,786
Manitoba                      10.9% on the first $30,544 of taxable income, +
                              15.4% on the next $34,456, +
                              17.4% on the amount over $65,000
Saskatchewan                  11.25% on the first $30,000 of taxable income, +
                              13.25% on the next $30,000, +
                              15.5% on the amount over $60,000
Alberta                       10% of taxable income
British Columbia              6.05% on the first $31,124 of taxable income, +
                              9.15% on the next $31,125, +
                              11.7% on the next $9,221, +
                              13.7% on the next $15,315, +
                              14.7% on the amount over $86,785
Yukon                         7.04% on the first $31,677 of taxable income, +
                              9.68% on the next $31,677, +
                              11.44% on the next $39,646, +
                              12.76% on the amount over $103,000
Northwest Territories         7.2% on the first $31,677 of taxable income, +
                              9.9% on the next $31,677, +
                              11.7% on the next $39,646, +
                              13.05% on the amount over $103,000
Nunavut                       4% on the first $31,677 of taxable income, +
                              7% on the next $31,677, +
                              9% on the next $39,646, +
                              11.5% on the amount over $103,000




                                          55
What are the income tax rates in Canada for
2001?
Federal tax rates for 2001 are:
      16% on the first $30,754 of taxable income;
      22% on the next $30,755 of taxable income;
      26% on the next $38,491 of taxable income; and
      29% of taxable income over $100,000.
The chart below reproduces the first calculation that has to be made on Page 1
of Schedule 1 of the tax package to calculate net federal tax. Page 1 is also used
to calculate federal non-refundable tax credits.
                         Federal tax on taxable income manual calculation chart 2001
                        Use this      Use this column if        Use this column if  Use this column if
                       column if     your taxable income       your taxable income     your taxable
                      your taxable is more than $30,754,      is more than $61,509,  income is more
                       income is      but not more than         but not more than     than $100,000
                     $30,754 or less       $61,509                   $100,000
Enter your                                                                                               1
taxable income
from line 260 of
your return
Base amount          −      0         − 30,754.00             − 61,509.00              −100,000.00       2
Line 1 minus line    =                =                       =                        =                 3
2 (this amount
cannot be
negative)
Federal tax rate     ×    16%         ×    22%                ×   26%                  ×   29%           4
Multiply the         =                =                       =                        =                 5
amount on line 3
by the tax rate on
line 4
Tax on the           +      0         + 4,921.00              + 11,687.00              + 21,694.00       6
amount from
line 2
Add lines 5 and 6    =                =                       =                        =                 7
The calculation continues on Page 2 of Schedule 1 to determine net federal tax.

Provincial/Territorial tax rates for 2001
Under the new Tax On Income (TONI) method, provincial tax for all provinces
(except Quebec) and the three territories is calculated the same way as federal
tax.
Form 428 is used to calculate this provincial or territorial tax. Provincial or
territorial specific non-refundable tax credits are also calculated on Form 428.
For complete details, see the Provincial information and forms in your 2001 tax
package.

                                                     56
                 Provincial/Territorial tax rates (combined chart) 2001
Provinces / Territories                                 Rate(s)
Newfoundland and             10.57% on the first $29,590 of taxable income, +
Labrador                     16.16% on the next $29,590, +
                             18.02% on the amount over $59,180
Prince Edward Island         9.8% on the first $30,754 of taxable income, +
                             13.8% on the next $30,755, +
                             16.7% on the amount over $61,509
Nova Scotia                  9.77% on the first $29,590 of taxable income, +
                             14.95% on the next $29,590, +
                             16.67% on the amount over $59,180
New Brunswick                9.68% on the first $30,754 of taxable income, +
                             14.82% on the next $30,755, +
                             16.52% on the next $38,491, +
                             17.84% on the amount over $100,000
Ontario                      6.16% on the first $30,814 of taxable income, +
                             9.22% on the next $30,815, +
                             11.16% on the amount over $61,629
Manitoba                     10.9% on the first $30,544 of taxable income, +
                             16.2% on the next $30,545, +
                             17.4% on the amount over $61,089
Saskatchewan                 11.5% on the first $30,000 of taxable income, +
                             13.5% on the next $30,000, +
                             16% on the amount over $60,000
Alberta                      10% of taxable income
British Columbia             7.3% on the first $30,484 of taxable income, +
                             10.5% on the next $30,485, +
                             13.7% on the next $9,031, +
                             15.7% on the next $15,000, +
                             16.7% on the amount over $85,000
Yukon                        7.36% on the first $30,754 of taxable income, +
                             10.12% on the next $30,755, +
                             11.96% on the next $38,491, +
                             13.34% on the amount over $100,000
Northwest Territories        7.2% on the first $30,754 of taxable income, +
                             9.9% on the next $30,755, +
                             11.7% on the next $38,491, +
                             13.05% on the amount over $100,000
Nunavut                      7.2% on the first $30,754 of taxable income, +
                             9.9% on the next $30,755, +
                             11.7% on the next $38,491, +
                             13.05% on the amount over $100,000




                                          57
What are the income tax rates in Canada for
2000?
What are the federal tax rates for 2000?
Federal tax is calculated, on Schedule 1 of the return, by applying a basic rate of
17% on the first $30,004.00 of taxable income. The next portion of $30,005.00
of taxable income is subjected to a rate of 25%. The maximum rate of 29% is
applied to any excess over $60,009.00 of taxable income (see calculation chart
in Table 1). Basic federal tax is then calculated by subtracting non-refundable
tax credits and, if applicable, certain other credits or adjustments.
What are the provincial/territorial tax rates for 2000?
Provincial tax for Nova Scotia, New Brunswick, Ontario, Manitoba and British
Columbia is calculated in the same way as the federal tax, under the new Tax
On Income (TONI) method. For the other provinces and territories (except for
Quebec), tax is based on a percentage of basic federal tax (see Table 2).
Some provincial or territorial surtaxes and reductions might also apply (see
Table 3).
Available provincial or territorial tax credits are listed in Table 4.


                                Table 1: Federal rates 2000
       Taxable income                                           Rate         Total tax
$30,004.00 or less                Taxable income              × 17%              = $ ________
                                   $ _________
more than $30,004.00              Taxable income
but less than or equal             $ _________                                     $ 5,101.00
to $60,009.00                     – $ 30,004.00              × 25% =             + $ ________
                                  = $ _________                                  = $ ________
more than $60,009.00                    Taxable income
                                           $ _________                             $ 12,602.00
                                        – $ 60,009.00        × 29% =             + $ ________
                                         = $ _________                           = $ ________



                         Table 2: Provincial/Territorial tax rates 2000
   Provinces / Territories                                  Rate(s)
Newfoundland                   62% of basic federal tax
Prince Edward Island           57.5% of basic federal tax
Nova Scotia                    9.77% on the first $29,590 of taxable income, +
                               14.95% on the next $29,590, +
                               16.67% on the amount over $59,180


                                              58
New Brunswick                    9.94% on the first $29,590 of taxable income, +
                                 15.21% on the next $29,590, +
                                 16.96% on the amount over $59,180
Ontario                          6.37% on the first $30,004 of taxable income, +
                                 9.62% on the next $30,005, +
                                 11.16% on the amount over $60,009
Manitoba                         8% on the first $29,590 of taxable income, +
                                 12.22% on the next $29,590, +
                                 13.63% on the amount over $59,180
Saskatchewan                     48% of basic federal tax
Alberta                          44% of basic federal tax
British Columbia                 8.4% on the first $30,004 of taxable income, +
                                 12.4% of the next $30,005, +
                                 14.35% on the amount over $60,009
Yukon                            49% of basic federal tax
Northwest Territories            45% of basic federal tax
Nunavut                          45% of basic federal tax
                    Table 3: Provincial/territorial surtaxes & reductions 2000
              Provinces / Territories                               Calculation
Newfoundland                                     (Basic NFLD income tax – $250)
(High income surtax)                             × 6% PLUS
                                                 (Basic NFLD income tax – $7,900)
                                                 × 10%
Prince Edward Island                             (Basic PEI income tax – $5,200)
(Surtax)                                         × 10%
(Low income reduction)                           (Certain amounts) – 5%
                                                 (Family net income – $15,000)
Nova Scotia                                      (Basic NS income tax – $10,000)
(Surtax)                                         × 10%
(Low income reduction)                           (Certain amounts) – 5%
                                                 (Family net income – $15,000)
New Brunswick                                    (Basic NB income tax – $13,500)
(Surtax)                                         × 8%
Ontario                                          (Basic ON income tax – $3,561)
(Surtax)                                         × 20% PLUS
(Reduction)                                      (Basic ON income tax – $4,468)
                                                 × 36%
                                                 (Certain amounts) –
                                                 (Adjusted basic ON income tax + Surtax)
Manitoba                                         Adjusted net income × 2%
(Net income tax)                                 (Net income tax) – (Certain amounts)
(Surtax on high income) (Reduction)              (Certain amounts) – (Net income tax)
Saskatchewan                                     Adjusted net income × 1.5%
(Flat tax)                                       SK tax + SK flat tax

                                                59
(Basic SK tax)                                     (Basic SK tax × 10%) – $150
(Debt reduction surtax)                            (Basic SK tax – $4,000) × 15%
(High income surtax)                               (Certain amounts) – 5%
(Reduction for middle and low income)              (Adjusted net income – $10,000)
Alberta                                            Taxable income × 0.5%
(Flat tax)                                         $430 – 50% (Basic AB tax + Flat tax)
(Selective reduction)
British Columbia                                   (Adjusted basic BC income tax – $5,300)
(Surtax)                                           × 30% PLUS
                                                   (Adjusted basic BC income tax – $8,660)
                                                   × 15% MINUS
                                                   (Certain amounts)
Yukon                                              (Basic Yukon tax - $6,000) × 5%
(Surtax)                                           $300 – 3% (Net income – $15,000)
(Low income family tax credit/reduction)           to a maximum of
                                                    80% (Basic Yukon tax + surtax)
Northwest Territories                              No surtax, no reduction
Nunavut                                            No surtax, no reduction




                        Table 4: Available provincial/territorial credits 2000
          Provinces / Territories                                  Credits
                                                      (see applicable provincial forms)
Common to all provinces                     Provincial foreign tax credit
and territories                             Political contribution tax
                                            credit (except Saskatchewan)
Newfoundland                                Equity tax credit
Prince Edward Island                        No additional credits
Nova Scotia                                 Labour-sponsored venture-capital
                                            tax credit
                                            Equity tax credit
                                            Home ownership savings
                                            plan tax credit
New Brunswick                               Labour-sponsored venture
                                            capital fund tax credit
                                            Stock savings plan
                                            tax credit
Ontario                                     Property tax credit
                                            Sales tax credit
                                            Labour-sponsored investment
                                            fund tax credit
                                            Employee ownership tax credit
                                            Home ownership savings
                                            plan tax credit

                                                 60
                      Table 4: Available provincial/territorial credits 2000
          Provinces / Territories                                Credits
                                                    (see applicable provincial forms)

                                          Tax Credits for
                                          Self-Employed Individuals:
                                          - co-operative education tax credit
                                          - graduate transitions tax credit
                                          - workplace child care tax credit
                                          - workplace accessibility tax credit
                                          - educational technology tax credit
Manitoba                                  Property tax credit
                                          Personal tax credit
                                          Labour-sponsored funds
                                          tax credit
                                          Equity tax credit
                                          Learning tax credit
Saskatchewan                              Labour-sponsored venture
                                          capital tax credit
                                          Post-secondary graduate
                                          tax credit
Alberta                                   Royalty tax rebate
British Columbia                          Sales tax credit
                                          Employee share ownership
                                          plan tax credit
                                          Employee venture capital
                                          tax credit
                                          Venture capital tax credit
                                          Mining exploration
                                          tax credit
                                          Logging tax credit
Yukon                                     Small business investment
                                          tax credit
                                          Labour-sponsored venture
                                          capital tax credit
                                          Mineral exploration tax credit
                                          Yukon First Nations
                                          income tax credit
Northwest Territories                     Cost-of-living tax credit
                                          Risk capital investment
                                          tax credits
Nunavut                                   Cost-of-living tax credit
                                          Risk capital investment
                                          tax credits


                                               61
What are the income tax rates in Canada for
1999?
A: Federal tax is calculated, on Schedule 1 of the return, by applying a basic
rate of 17% on the first $29,590.00 of taxable income. The next portion
of $29,590.00 of taxable income is subjected to a rate of 26%. The maximum
rate of 29% is applied to any excess over $59,180.00 of taxable income (see
calculation chart in Table 1). Basic federal tax is then calculated by subtracting
non-refundable tax credits and, if applicable, certain other credits or
adjustments.
Provincial or territorial tax (except for Québec residents) is based on a
percentage of basic federal tax (see Table 2).
Some provincial or territorial surtaxes and reductions might also apply (see
Table 3).
Available provincial or territorial tax credits are listed in Table 4. Refer to
applicable Provincial/Territorial T1C forms for details on those credits.

                             Table 1 : Federal rates 1999
Taxable income                                       Rate   Total tax
 $29,590.00 or less              Taxable income     × 17%               = $ ________
                                   $ _________
 more than $29,590.00            Taxable income
 but less than or equal            $ _________                            $ 5,030.00
 to $59,180.00                   – $ 29,590.00 × 26% =                  + $ ________
                                 = $ _________                          = $ ________
 more than $59,180.00            Taxable income
                                   $ _________                            $ 12,724.00
                                 – $ 59,180.00 × 29% =                  + $ ________
                                 = $ _________                          = $ ________




                                         62
                        Table 2 : Provincial/Territorial tax rates 1999
Provinces / Territories                                      of Basic federal tax
Newfoundland                                                        69%
Prince Edward Island                                              58.5%
Nova Scotia                                                       57.5%
New Brunswick                                                       60%
Ontario                                                           39.5%
Manitoba                                                           48.5%
Saskatchewan                                                        48%
Alberta                                                             44%
British Columbia                                                  49.5%
Yukon                                                               50%
Northwest Territories                                               45%
Nunavut                                                             45%



                  Table 3 : Provincial/Territorial surtaxes & reductions 1999
          Provinces / Territories                              Calculation
Newfoundland                              (Basic NFLD income tax – $7,900)
(High income surtax)                      × 10%
Prince Edward Island                      (Basic PEI income tax – $5,200)
(Surtax)                                  × 10%
Nova Scotia                               (Basic NS income tax – $10,000)
(Surtax)                                  × 10%
(Low income reduction)                    (Certain amounts)
                                          – 5% (Family net income – $15,000)
New Brunswick                             (Basic NB income tax – $13,500)
(Surtax)                                  × 8%
Ontario                                   (Basic ON income tax – $3,750)
(Fair Share Health                        × 20% PLUS
Care Levy)                                (Basic ON income tax – $4,681)
(Reduction)                               × 36%
                                          (Certain amounts) –
                                          (Basic ON income tax + Fair Share)
Manitoba                                  Adjusted net income × 2%
(Net income tax)                          (Net income tax) – (Certain amounts)
(Surtax on high income)                   (Certain amounts) – (Net income tax)
(Reduction)
Saskatchewan                              Adjusted net income × 2%
(Flat tax)                                SK tax + SK flat tax
(Basic SK tax)                            (Basic SK tax × 10%) – $150
(Debt reduction surtax)                   (Basic SK tax – $4,000) × 15%

                                              63
(High income surtax)
(Reduction for middle                    (Certain amounts) – 5%
and low income)                          (Adjusted net income – $10,000)
Alberta                                  (Basic AB tax – $3,500)
(Surtax)                                 × 8%
(Flat tax)                               Taxable income × 0.5%
(Selective reduction)                    $430 – 50%
                                         (Basic AB tax + Surtax + Flat tax)
British Columbia                         (Adjusted BC income tax – $5,300)
(Surtax)                                 × 30% PLUS
                                         (Adjusted BC income tax – $8,660)
                                         × 19% MINUS
                                         (Certain amounts)
Yukon                                    (Basic Yukon tax - $6,000) × 5%
(Surtax)                                 $300 – 3 % (Net income – $15,000)
(Low income family                       to a maximum of
tax credit/reduction)                     80% (Basic Yukon tax + surtax)
Northwest Territories                    No surtax, no reduction
Nunavut                                  No surtax, no reduction


                    Table 4 : Available provincial/territorial credits 1999
               Provinces / Territories                                 Credits
                                                             (see applicable T1C forms)
Common to all provinces                                Provincial foreign tax credit
and territories                                        Political contribution tax credit
                                                       (except Saskatchewan)
Newfoundland                                           No additional credits
Prince Edward Island                                   No additional credits
Nova Scotia                                            Labour-sponsored venture-capital
                                                       tax credit
                                                       Equity tax credit
                                                       Home ownership savings
                                                       plan tax credit
New Brunswick                                          Labour-sponsored venture
                                                       capital fund tax credit
                                                       Stock savings plan tax credit
Ontario                                                Property tax credit
                                                       Sales tax credit
                                                       Labour-sponsored investment
                                                       fund tax credit
                                                       Employee ownership tax credit
                                                       Home ownership savings
                                                       plan tax credit



                                              64
                   Table 4 : Available provincial/territorial credits 1999
               Provinces / Territories                                Credits
                                                            (see applicable T1C forms)
                                                      Tax Credits for
                                                      Self-Employed Individuals:
                                                      - co-operative education tax credit
                                                      - graduate transitions tax credit
                                                      - workplace child care tax credit
                                                      - workplace accessibility tax credit
Manitoba                                              Property tax credit
                                                      Cost-of-living tax credit
                                                      Labour-sponsored funds tax credit
                                                      Equity tax credit
                                                      Learning tax credit
Saskatchewan                                          Labour-sponsored venture
                                                      capital tax credit
Alberta                                               Royalty tax rebate
British Columbia                                      Sales tax credit
                                                      Employee share ownership
                                                      plan tax credit
                                                      Employee venture
                                                      capital tax credit
                                                      Venture capital tax credit
                                                      Mining exploration
                                                      tax credit
                                                      Logging tax credit
Yukon                                                 Small business investment tax credit
                                                      Mineral exploration tax credit
                                                      Yukon First Nations income tax
                                                      credit
Northwest Territories                                 Cost-of-living tax credit
                                                      Risk capital investment tax credits
Nunavut                                               Cost-of-living tax credit
                                                      Risk capital investment tax credits




                                             65
Corporation tax rates
Federal rates

The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax
abatement.
For Canadian-controlled private corporations claiming the small business
deduction, the net tax rate before surtax* is:
       12% before January 1, 2008
       11% effective January 1, 2008
For the other corporations, the net tax rate before surtax* will decrease as
follows:
       21% before January 1, 2008
       19.5% effective January 1, 2008
       19% effective January 1, 2009
       18% effective January 1, 2010
       16.5% effective January 1, 2011
       15% effective January 1, 2012
*The corporate surtax is zero, effective January 1, 2008.
Provincial or territorial rates
Generally, provinces and territories have two rates of income tax - a lower rate
and a higher rate.
Lower rate
The lower rate applies to either:
       The income eligible for the federal small business deduction; or
       The income based on limits established by the particular province or
   territory.

Higher rate
The higher rate applies to all other taxable income.
Provincial and territorial tax rates (except Quebec and Alberta)
The following table shows the income tax rates for provinces and territories
(except Quebec and Alberta, which do not have corporation tax collection
agreements with the CRA).




                                       66
     These rates are in effect on January 1, 2009, and some might change
                                   during 2009
             Province or territory                  Lower     Higher rate
                                                     rate
   Newfoundland and Labrador                         5%           14%
   Nova Scotia                                       5%           16%
   Prince Edward Island                             3.2%*         16%
   New Brunswick                                     5%         13%**
   Ontario                                          5.5%          14%
   Manitoba                                          1%           13%
   Saskatchewan                                     4.5%          12%
   British Columbia                                 2.5%          11%
   Yukon                                             4%           15%
   Northwest Territories                             4%          11.5%
   Nunavut                                           4%           12%
     * 2.1% effective April 1, 2009
     ** 12% effective July 1, 2009



Canada Tax treaties
Double Taxation Treaties are conventions between two countries that aim to

Eliminate the double taxation of income or gains arising in one territory and

Paid to residents of another territory. They work by dividing the tax rights each

Country claims by its domestic laws over the same income and gains.

Over 1,300 Double Taxation Conventions exist world-wide. The tax treaty table

Between Canada and others countries are as follow:

(http://www.fin.gc.ca/treaties-conventions/cndtxtreat_-eng.asp)




                                       67
68
Please kindly note the tax treaty with Colombia Greece, Italy , Lebanon and
Turkey signed but not yet in force till Aug.2009.

   In the other hand the tax treaties with Barbados ,Bolivia, Costa Rica ,Cuba,
   Egypt, Madagascar ,Malaysia, Namibia ,Poland, Serbia, Montenegro,
   Singapore and Spain are under negotiation/re-negotiation.




                                       69
Tax treaty rate




                  70
71
72
73
74
75
British Columbia - Provincial
corporation tax
Lower rate
The lower rate of British Columbia income tax is 2.5% effective December 1,
2008. The lower rate was 3.5% effective July 1, 2008 and before this date it was
4.5%.
The income eligible for the lower rate is determined using the British Columbia
business limit of $400,000. The business limit will be increased to $500,000
effective January 1, 2010.

Higher rate
The higher rate of British Columbia income tax is 11% effective July 1, 2008.
Before this date it was 12%. The higher rate will decrease to;
      10.5% effective January 1, 2010; and to
      10% effective January 1, 2011.
The higher rate applies to all income not eligible for the lower rate.
When the rate or the business limit changes during the tax year, you have to
base your calculation on the number of days in the year that each rate or limit is
in effect.

Reporting the tax
You can use Schedule 427, British Columbia Corporation Tax Calculation, to
help you calculate your British Columbia tax before the application of credits.
You do not have to file it with the return. See the schedule for more details.

Generally, provinces and territories have two rates of income tax: the lower rate
and the higher rate.
The lower rate applies to either:
       the income eligible for the federal small business deduction; or
       the income based on limits established by the particular province or
       territory.
The higher rate applies to all other income
Corporation X earned all of its income for 2009 from its permanent
establishment in Newfoundland and Labrador. Corporation X claimed the small
business deduction when it calculated its federal tax payable. The income from
active business carried on in Canada was $78,000.
The Newfoundland and Labrador lower rate of tax is 5%. The higher rate of
tax is 14%.

                                        76
See example 1. Corporation X calculates its Newfoundland and Labrador tax
payable as follows:

Taxable income                                                              $90,000
Subtract amount taxed at lower rate:                                        $78,000
Least of lines 400, 405, 410, or 425 of the return, in the small business
deduction calculation
Amount taxed at higher rate                                                 $12,000
Taxes payable at the lower rate:                                             $ 3,900
$78,000 × 5% =
Taxes payable at the higher rate:                                            $ 1,680
$12,000 × 14% =
Newfoundland and Labrador tax payable                                        $ 5,580

When you allocate taxable income to more than one province or territory,
you also have to allocate proportionally any income eligible for the small
business deduction.

See example 2. Corporation Y has permanent establishments in both Nova
Scotia and the Yukon. Its tax year runs from September 1, 2008, to
August 31, 2009. Corporation Y claimed the small business deduction when it
calculated its federal tax payable. The lower rate of tax for Nova Scotia is 5%,
and the higher rate of tax is 16%.To calculate its Nova Scotia income tax,
Corporation Y does the following calculations:

Taxable income allocated to Nova Scotia                                     $60,000
(from Schedule 5)
Taxable income allocated to the Yukon                                       $30,000
(from Schedule 5)
Total taxable income earned in Canada                                       $90,000
Least of lines 400, 405, 410, or 425 of the return, in the small            $78,000
business deduction calculation
Income eligible for the small business deduction attributed to Nova         $52,000
Scotia:
($60,000 ÷ $90,000) × $78,000 =
Taxable income earned in Nova Scotia                                        $60,000
Subtract: Income eligible for the small business deduction attributed       $52,000
to Nova Scotia
Amount taxed at higher rate                                                 $ 8,000
Taxes payable at higher rate:                                               $ 1,280
 $8,000 × 16% =
Taxes payable at lower rate:                                                $ 2,600
 $52,000 × 5% =
Nova Scotia tax payable                                                     $ 3,880


                                             77
To calculate its Yukon income tax payable, Corporation Y would repeat the
same steps, using the rates that apply.


Corporation tax rates
Federal rates
The basic rate of Part I tax is 38% of your taxable income, 28% after federal tax
abatement.
For Canadian-controlled private corporations claiming the small business
deduction, the net tax rate before surtax* is:
       12% before January 1, 2008
       11% effective January 1, 2008
For the other corporations, the net tax rate before surtax* will decrease as
follows:
       21% before January 1, 2008
       19.5% effective January 1, 2008
       19% effective January 1, 2009
       18% effective January 1, 2010
       16.5% effective January 1, 2011
       15% effective January 1, 2012
*The corporate surtax is zero, effective January 1, 2008.
Provincial or territorial rates
Generally, provinces and territories have two rates of income tax - a lower rate
and a higher rate.
Lower rate
The lower rate applies to either:
       the income eligible for the federal small business deduction; or
       the income based on limits established by the particular province or
   territory.
Higher rate
The higher rate applies to all other taxable income.
Provincial and territorial tax rates (except Quebec and Alberta)
The following table shows the income tax rates for provinces and territories
(except Quebec and Alberta, which do not have corporation tax collection
agreements with the CRA).
These rates are in effect on January 1, 2010, and some might change
during 2010.




                                       78
           Province or territory               Lower rate        Higher rate
Newfoundland and Labrador                          5%               14%
Nova Scotia                                        5%               16%
Prince Edward Island                              2.1%              16%
New Brunswick                                      5%               12%
Ontario                                           5.5%              14%
Manitoba                                           1%               12%
Saskatchewan                                      4.5%              12%
British Columbia                                  2.5%             10.5%
Yukon                                              4%               15%
Northwest Territories                              4%              11.5%
Nunavut                                            4%               12%

For a table that shows the income tax rates as of January 1, 2010, for the
provinces and territories that have corporate tax collection agreements with the
federal government.

       Tax Brackets                Rate (%)              Provincial Surtax
  Federal (note)             $10,382 to $40,970       15.00
                             $40,970 to $81,941       22.00
                             $81,941 to $127,021      26.00
                             $127,021 and higher      29.00
  British Columbia           $11,000 to $35,859       5.06
                             $35,859 to $71,719       7.70
                             $71,719 to $82,342       10.50
                             $82,342 to $99,987       12.29
                             $99,987 and higher       14.70




                                       79
                                                                  British Columbia (BC) combined federal & provincial tax rates / 2004-2010
                                                                                                                                                                            Marginal Tax Rates
                                Taxable Income                                                                                                                              Canadian Dividends
                                                                                            Capital Gains                                                                                                                                                       Other Income
                                                                                                                                        Small Business Dividends                                           Eligible Dividends
  2004      2005       2006         2007         2008      2009       2010      2004-                         2008-    2004-                                                       2004-                                                              2004-                      2008-
                                                                                          2006       2007                        2006       2007      2008         2009    2010                  2006     2007        2008       2009       2010                2006     2007
                                                                                2005                          2010     2005                                                        2005                                                               2005                       2010
first      first      first       first      first        first      first
$32,476    $33,061    $33,755     $34,397    $35,016      $35,716    $35,859    11.03%   10.65%    10.35%     10.03%   4.52%    3.58%       2.83%    2.03%     3.16%      4.16%    4.52%    (14.02%)     (14.89%)   (15.81%)    (14.36%)   (12.59%)   22.05%   21.30%   20.70%   20.06%

over       over       over        over       over         over       over
$32,476    $33,061    $33,755     $34,397    $35,016      $35,716    $35,859
up to      up to      up to       up to      up to        up to      up to
$35,000    $35,595    $36,378     $37,178    $37,885      $40,726    $40,970    12.58%   12.20%    11.83%     11.35%   8.40%    7.46%       6.52%    5.33%     6.46%      7.46%    8.40%     (9.52%)     (10.61%)   (11.99%)    (10.54%)   (8.79%)    25.15%   24.40%   23.65%   22.70%



over       over       over        over       over         over       over
$35,000    $35,595    $36,378     $37,178    $37,885      $40,726    $40,970
up to      up to      up to       up to      up to        up to      up to
$64,954    $66,123    $67,511     $68,794    $70,033      $71,433    $71,719    15.58%   15.58%    15.33%     14.85%   15.90%   15.90%     15.27%    14.08%    15.21%     16.21%   15.90%        0.27%   (0.46%)     (1.84%)    (0.38%)     1.29%     31.15%   31.15%   30.65%   29.70%



over       over       over        over       over         over       over
$64,954    $66,123    $67,511     $68,794    $70,033      $71,433    $71,719
up to      up to      up to       up to      up to        up to      up to
$70,000    $71,190    $72,756     $74,357    $75,769      $81,452    $81,941    16.85%   16.85%    16.55%     16.25%   19.08%   19.08%     18.33%    17.58%    18.71%     19.71%   19.08%        3.96%    3.10%       2.23%      3.68%      5.32%     33.70%   33.70%   33.10%   32.50%



over       over       over        over       over         over       over
$70,000    $71,190    $72,756     $74,357    $75,769      $81,452    $81,941
up to      up to      up to       up to      up to        up to      up to
$74,575    $75,917    $77,511     $78,984    $80,406      $82,014    $82,342    18.85%   18.85%    18.55%     18.25%   24.08%   24.08%     23.33%    22.58%    23.71%     24.71%   24.08%        9.76%    8.90%       8.03%      9.48%     11.08%     37.70%   37.70%   37.10%   36.50%



over       over       over        over       over         over       over
$74,575    $75,917    $77,511     $78,984    $80,406      $82,014    $82,342
up to      up to      up to       up to      up to        up to      up to
$90,555    $92,185    $94,121     $95,909    $97,636      $99,588    $99,987    19.85%   19.85%    19.50%     19.15%   26.58%   26.58%     25.71%    24.82%    25.95%     26.95%   26.58%    12.67%      11.65%      10.62%     12.07%     13.66%     39.70%   39.70%   39.00%   38.29%



over       over       over        over       over         over       over
$90,555    $92,185    $94,121     $95,909    $97,636      $99,588    $99,987
up to      up to      up to       up to      up to        up to      up to
$113,804   $115,739   $118,285    $120,887   $123,184     $126,264   $127,021   20.35%   20.35%    20.35%     20.35%   27.83%   27.83%     27.83%    27.83%    28.96%     29.96%   27.83%    14.11%      14.11%      14.11%     15.56%     17.13%     40.70%   40.70%   40.70%   40.70%



over       over       over        over       over         over       over
$113,804   $115,739   $118,285    $120,887   $123,184     $126,264   $127,021   21.85%   21.85%    21.85%     21.85%   31.58%   31.58%     31.58%    31.58%    32.71%     33.71%   31.58%    18.46%      18.46%      18.46%     19.91%     21.45%     43.70%   43.70%   43.70%   43.70%




Marginal tax rate for dividends is a % of actual dividends received (not
grossed-up amount).
                        BC Basic Personal Amount                                                   Tax Rate
  2004      2005       2006       2007       2008          2009       2010        2004-2006          2007       2008-2010

 $8,523     $8,676     $8,858      $9,027        $9,189    $9,373    $11,000        6.05%           5.70%         5.06%



Source: Dayarayan centre of tax research


                                                                                                                                              80
                                                     Ontario (ON) combined federal & provincial tax rates including surtaxes / 2004-2010
                                                                                                                                                                  Marginal Tax Rates
                                           Taxable Income                                                                                                         Canadian Dividends

                                                                                                                                  Small Business Dividends                        Eligible Dividends
                                                                                                        Capital Gains                                                                                                      Other Income
     2004           2005         2006         2007          2008          2009            2010                                                                2004-
                                                                                                                                   2004-2009          2010              2006      2007        2008      2009      2010
                                                                                                                                                              2005
 first $33,375   first        first        first        first        first $36,848    first $37,106                                                                                                                        2004-
                                                                                                      2004-05   11.03%           2004-05   4.48%                                                                                   22.05%
                 $34,010      $34,758      $35,488      $36,020                                                                                                                                                               05
                                                                                                        2006    10.65%             2006    3.55%                                                                            2006   21.30%
                                                                                                                                                      3.16%   4.48%    (6.04%)   (6.69%)    (7.13%)    (7.71%)   (6.23%)
                                                                                                                                                                                                                           2007-
                                                                                                      2007-09   10.53%             2007    3.23%                                                                                   21.05%
                                                                                                                                                                                                                              09
                                                                                                        2010    10.03%           2008-09   3.88%                                                                            2010   20.05%
 over            over         over         over         over         over $36,848     over $37,106                                                                                                                         2004-
                                                                                                      2004-05   12.58%           2004-05   8.36%                                                                                   25.15%
 $33,375 up      $34,010 up   $34,758 up   $35,488 up   $36,020 up   up to $40,726    up to                                                                                                                                   05
 to $35,000      to $35,595   to $36,378   to $37,178   to $37,885                    $40,970           2006    12.20%             2006    7.42%      7.90%   8.36%    (1.55%)    (2.2%)    (2.63%)    (3.21%)   (0.32%)    2006   24.40%
                                                                                                                                                                                                                           2007-
                                                                                                      2007-10   12.08%           2007-09   7.11%                                                                                   24.15%
                                                                                                                                                                                                                              10
 over            over         over         over         over         over $40,726     over $40,970
 $35,000 up      $35,595 up   $36,378 up   $37,178 up   $37,885 up   up to $64,882    up to               15.58%                    15.86%           16.65%   15.86%   8.24%      7.95%      7.52%     6.94%     9.76%        31.15%
 to $58,771      to $59,880   to $61,206   to $62,485   to $63,428                    $65,345
 over            over         over         over         over         over $64,882     over $65,345
 $58,771 up      $59,880 up   $61,206 up   $62,485 up   $63,428 up   up to $73,698    up to               16.49%                    16.86%           17.81%   16.86%   9.01%      8.66%      8.14%     7.44%     10.55%       32.98%
 to $66,752      to $68,020   to $69,517   to $70,976   to $72,041                    $74,214
 over            over         over         over         over         over $73,698     over $74,214
 $66,752 up      $68,020 up   $69,517 up   $70,976 up   $72,041 up   up to $76,440    up to               17.70%                    19.88%           20.82%   19.88%   12.51%    12.16%      11.64%    10.94%    14.02%       35.39%
 to $69,240      to $70,560   to $72,102   to $73,625   to $74,720                    $76,986
 over            over         over         over         over         over $76,440     over $76,986
 $69,240 up      $70,560 up   $72,102 up   $73,625 up   $74,720 up   up to $81,452    up to               19.70%                    22.59%           23.82%   22.59%   14.94%    14.49%      13.81%    12.91%    16.49%       39.41%
 to $70,000      to $71,190   to $72,756   to $74,357   to $75,769                    $81,941
 over            over         over         over         over         over $81,452     over $81,941
 $70,000 up      $71,190 up   $72,756 up   $74,357 up   $75,769 up   up to $126,264   up to
                                                                                                          21.70%                    27.59%           28.82%   27.59%   20.74%    20.29%      19.61%    18.71%    22.25%       43.41%
 to $113,804     to           to           to           to                            $127,021
                 $115,739     $118,285     $120,887     $123,184
 over            over         over         over         over         over $126,264    over
                                                                                                          23.20%                    31.34%           32.57%   31.34%   25.09%    24.64%      23.96%    23.06%    26.57%       46.41%
 $113,804        $115,739     $118,285     $120,887     $123,184                      $127,021



 Marginal tax rate for dividends is a % of actual dividends received (not grossed-up amount).
                                      ON Basic Personal Amount                                                               Tax Rate
     2004           2005         2006        2007         2008              2009             2010               2004-2009                         2010
    $8,044         $8,196       $8,377      $8,553       $8,681            $8,881           $8,943                6.05%                          5.05%
Source: Dayarayan centre of tax research




                                                                                                                            81
    Federal Income Tax Rates for Income Earned by a Canadian-Controlled Private Corporation
                                       (CCPC) 2008-2011
                                                        Active Business Income
                            Small Business Income up to                              General Active Business
                                                          between $400,000 and                                      Investment Income
       Description                   $400,000                                                Income
                                                                $500,000
                             2008 2009 2010 2011 2008 2009 2010 2011 2008 2009 2010 2011 2008 2009 2010 2011
General corporate rate       38.0   38.0   38.0   38.0  -     38.0   38.0    38.0  38.0   38.0    38.0   38.0  38.0    38.0   38.0    38.0
Federal abatement           (10.0) (10.0) (10.0) (10.0) -    (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0)
                             28.0   28.0   28.0   28.0  -     28.0   28.0    28.0  28.0   28.0    28.0   28.0  28.0    28.0   28.0    28.0
Small business deduction    (17.0) (17.0) (17.0) (17.0) -    (17.0) (17.0) (17.0) 0.0      0.0     0.0    0.0   0.0     0.0    0.0     0.0
Rate reduction                0.0    0.0    0.0    0.0  -      0.0    0.0     0.0  (8.5) (9.0) (10.0) (11.5) 0.0        0.0    0.0     0.0
Refundable tax                0.0    0.0    0.0    0.0  -      0.0    0.0     0.0   0.0    0.0     0.0    0.0   6.7     6.7    6.7     6.7
                             28.0   28.0   28.0   28.0  -     28.0   28.0    28.0  28.0   28.0    28.0   28.0  34.7    34.7   34.7    34.7


              Comparison of Canada Corporate income tax rates- Federal and BC –(2003-2012)
                                                     2003    2004     2005       2006    2007       2008        2009    2010    2011       2012
                         General/M&P/Investment      24.12   22.12    22.12      22.12   22.12     19.50        19.00   18.00   16.50      15.00
 Federal(1)              Small business              13.12   13.12    13.12      13.12   13.12     11.00        11.00   11.00   11.00      11.00
                         Investment - CCPC           35.79   35.79    35.79      35.79   35.79     34.67        34.67   34.67   34.67      34.67
                         General/M&P/Investment      13.50   13.50 13.50/12.00   12.00   12.00 12.00/11.00      11.00   10.50   10.00      10.00
 British Columbia(2)
                         Small business               4.50    4.50     4.50       4.50    4.50 4.50/3.50/2.50    2.50    2.50    2.50       2.50

 (1) Federal: The income limit for the purposes of the small business deduction (SBD limit) has been $300,000 since 2005. The May 2, 2006 federal
 budget provided for a rise in the SBD limit to $400,000 effective January 1, 2007. The January 27, 2009 federal budget provides for an increase in
 the SBD limit to $500,000, effective January 1, 2009. The business limit must be allocated between associated corporations. The SBD is reduced
 progressively on a straight-line basis for CCPCs when their taxable capital used in Canada varies between $10 million and $15 million.
 (2) British Columbia: SBD limit: increased to $400,000 for taxation years ending after December 31, 2004. As announced in the February 19, 2008
 budget, the General/M&P/Investment rate was reduced to 11% effective July 1, 2008, to 10.5% effective January 1, 2010 and to 10% effective
 January 1, 2011. In addition, the rate for small businesses was reduced to 3.5% effective July 1, 2008, to 3% effective January 1, 2010 and to 2.5%
 effective January 1, 2011. On October 23, 2008, the government brought down its Economic Update which proposed a further decrease in the rate
 for small businesses, from 3.5% to 2.5% effective December 1, 2008. The February 17, 2009 budget confirmed the previously announced rate
                                                                          82
reductions. In a news release dated April 7, 2009, the B. C. government announced that the SBD limit would be increased from $400,000 to
$500,000 on January 1, 2010.




                                                           Standard deduction
                                                                                                             Additional
                                   Married      Married                                       Additional
                     Head of                                Qualifying                                       Amount if
    Year Single                     Filing       Filing                 Dependent             Amount if                     Personal Exemption
                    Household                             Widow/Widower                                      age 65 or
                                    Joint      Seperately                                       Blind
                                                                                                               older
                                                                                  $850 -
    2005 $5,350       $7,850       $10,700       $5,350          $10,700                        $1,050         $1,050              $3,400
                                                                                  $5,350
                                                                                  $850 -
    2006 $5,150       $7,550       $10,300       $5,150          $10,300                        $1,000         $1,000              $3,300
                                                                                  $5,150
                                                                                  $850 -
    2007 $5,350       $7,850       $10,700       $5,350          $10,700                        $1,050         $1,050              $3,400
                                                                                  $5,350
                                                                                  $900 -       $1,050 /       $1,050 /
    2008 $5,450       $8,000       $10,900       $5,450          $10,900                                                           $3,500
                                                                                  $5,450      $1,350 (1)     $1,350 (1)
                                                                                  $950 -       $1,100 /       $1,100 /
    2009 $5,700       $8,350       $11,400       $5,700          $11,400                                                           $3,650
                                                                                  $5,700      $1,400 (2)     $1,400 (2)

    (1) $1,050 (for married filing joint, married filing separately, or qualifying widow); $1,350 (for single and head of household)
    (2) $1,100 (for married filing joint, married filing separately, or qualifying widow); $1,400 (for single and head of household)




                                                                           83
                               Comparison of Corporate Tax Rates 2003-2009

                                Federal                    British Columbia   Top marginal rate
  year                                         Investments                    Capital               Other Income
              General SBD M&P                              General/M&P SBD            Dividends
                                                 (CCPC)                        Gain
 2003           24.12     13.12    22.12          35.79       13.50    4.50   21.85     31.58          43.70
 2004           22.12     13.12    22.12          35.79       13.50    4.50   21.85     31.58          43.70
 2005           22.12     13.12    22.12          35.79       13.50    4.50   21.85     31.58          43.70
 2006           22.12     13.12    22.12          35.79       12.00    4.50   21.85       -            43.70
 2007           22.12     13.12    22.12          35.79       12.00    4.50   18.47     31.58          43.70
 2008           20.59     11.50    20.59          34.67       12.00    4.50   21.85     31.58          43.70
 2009           20.00     11.00    20.00          34.67       12.00    4.50   21.85     32.71          43.70

                                      Deferred Income Plans - Maximum Contributions
                                             Year                                         RRSP(1)        RPP(2)
                                             1995                                         $14,500       $15,500
                                          1996-2002                                       $13,500       $13,500
                                             2003                                         $14,500       $15,500
                                             2004                                         $15,500       $16,500
                                             2005                                         $16,500       $18,000
                                             2006                                         $18,000       $19,000
                                             2007                                         $19,000       $20,000
                                             2008                                         $20,000       $21,000
                                             2009                                         $21,000       $22,000
                                             2010                                         $22,000          -
(1) RRSP: Registered Retirement Savings Plan
(2) RPP: Registered Pension Plan


                                                             84
                 Table of Canadian Federal Tax Rates for the years 2001- 2010
                                                                   2006    2007                                                                2010
           Portion          2001   2002    2003    2004     2005                                                     2008          2009
1st portion of taxable income    $30,754    $31,677    $32,183     $35,000      $35,595       $36,378    $37,178    $37,885       $40,726     $40,970
Applicable Rate                  16.00%     16.00%     16.00%      16.00%       15.00%        15.25%     15.00%     15.00%        15.00%      15.00%
Next portion of taxable                                                                                                                       $40,971
income                           $30,755    $31,677    $32,185     $35,000      $35,595       $36,378    $37,179    $37,884       $40,726
Applicable Rate                  22.00%     22.00%     22.00%      22.00%       22.00%        22.00%     22.00%     22.00%        22.00%      22.00%
Next portion of taxable                                                                                                                       $45,080
income                            $38,491    $39,646    $40,280     $43,804      $44,549      $45,529    $46,530     $47,415       $44,812
Applicable Rate                   26.00%     26.00%     26.00%      26.00%       26.00%       26.00%     26.00%      26.00%        26.00%      26.00%
On the amount over               $100,000   $103,000   $104,648    $113,804     $115,739     $118,285   $120,887    $123,184      $126,264    $127,021
Applicable Rate                   29.00%     29.00%     29.00%      29.00%       29.00%       29.00%     29.00%      29.00%        29.00%      29.00%
  Source: Dayarayan centre of tax research

      Table of Individual Income Tax Rates for the Province of British Columbia / 2001- 2010
                   Portion                     2001      2002       2003        2004        2005      2006      2007      2008        2009       2010
 st
1 portion of taxable income                  $30,484   $31,124    $31,653     $32,476     $33,061   $33,755   $34,397   $35,016     $35,716    $35,859
Applicable Rate                               7.30%     6.05%      6.05%       6.05%       6.05%     6.05%     5.70%     5.06%       5.06%      5.06%
Next portion of taxable income               $30,485   $31,125    $31,655     $32,478     $33,062   $33,756   $34,397   $35,017     $35,717    $35,860
Applicable Rate                              10.50%     9.15%      9.15%       9.15%       9.15%     9.15%     8.65%     7.70%       7.70%      7.70%
Next portion of taxable income                $9,031    $9,221     $9,377      $9,621      $9,794   $10,000   $10,190   $10,373     $10,581    $10,623
Applicable Rate                              13.70%    11.70%     11.70%      11.70%      11.70%    11.70%    11.10%    10.50%      10.50%     10.50%
Next portion of taxable income               $15,000   $15,315    $15,575     $15,980     $16,268   $16,610   $16,925   $17,230     $17,574    $17645
Applicable Rate                              15.70%    13.70%     13.70%      13.70%      13.70%    13.70%    13.00%    12.29%      12.29%     12.29%
On the amount over                           $85,000   $86,785    $88,260     $90,555     $92,185   $94,121   $95,909   $97,636     $99,588    $99,987
Applicable Rate                              16.70%    14.70%     14.70%      14.70%      14.70%    14.70%    14.70%    14.70%      14.70%     14.70%
  Source: Dayarayan centre of tax research

                                                                        85
BC Combined Federal and Provincial Income Tax Rates for Income Earned by a Canadian-
                      Controlled Private Corporation(CCPC)
                                                                  Active
                                                                Business
                                      Small Business Income      Income       General Active
             Effective date                                                                    Investment Income
                                         up to $400,000         between      Business Income
                                                              $400,000 and
                                                                $500,000
              01-Jan-08                  15.5/14.5/13.5%            -          31.5/30.5%         46.7/45.7%
              01-Jan-09                      13.50%             22.00%           30.00%             45.70%
              01-Jan-10                      13.50%             21.50%           28.50%             45.20%
              01-Jan-11                      13.50%             21.00%           26.50%             44.70%


  BC Provincial Income Tax Rates for Income Earned by a Canadian-Controlled Private
                                 Corporation(CCPC)
                                                                  Active
                                                                Business
                                      Small Business Income      Income       General Active
             Effective date                                                                    Investment Income
                                         up to $400,000         between      Business Income
                                                              $400,000 and
                                                                $500,000
              01-Jan-08                   4.5/3.5/2.5%              -            12/11%             12/11%
              01-Jan-09                      2.50%                11%             11%                11%
              01-Jan-10                      2.50%              10.50%           10.50%             10.50%
              01-Jan-11                      2.50%                10%             10%                10%




                                            86
   Small Business Income (SBI) Thresholds for Canadian-Controlled Private Corporations (CCPCs)
   2008-2011
                                        Description                                                 2008                   2009                  2010                            2011
   Federal                                                                                        $400,000               $500,000              $500,000                        $500,000
   British Columbia                                                                               $400,000               $400,000              $400,000                        $400,000




                             Federal Personal Income Tax Rates / 2004-2010
                                                                                                                                          Marginal Tax Rates
                                       Taxable Income                                                                                     Canadian Dividends
                                                                                                 Capital Gains        Small Business                                                       Other Income
                                                                                                                                                          Eligible Dividends
                                                                                                                        Dividends
  2004         2005         2006           2007           2008         2009         2010                 2005-                 2005-                      2005-       2007-                      2005-
                                                                                                2004                  2004                     2004                              2010     2004
                                                                                                         2010                  2010                       2006        2009                       2010
first        first        first          first          first        first        first
$35,000      $35,595      $36,378        $37,178        $37,885      $40,726      $40,970      8.00%     7.50%    3.33%       2.08%           3.33%       2.08%      (5.75%)    (4.28%)   16%    15.00%
over         over         over           over           over         over         over
$35,000 up   $35,595 up   $36,378 up     $37,178 up     $37,885 up   $40,726 up   $40,970 up   11.00%   11.00%    10.83%      10.83%          10.83%      10.83%      4.40%      5.80%    22%    22.00%
to $70,000   to $71,190   to $72,756     to $74,357     to $75,769   to $81,452   to $81,941
over         over         over           over           over         over         over
$70,000 up   $71,190 up   $72,756 up     $74,357 up     $75,769 up   $81,452 up   $81,941 up
                                                                                               13.00%   13.00%    15.83%      15.83%          15.83%      15.83%     10.20%     11.56%    26%    26.00%
to           to           to             to             to           to           to
$113,804     $115,739     $118,285       $120,887       $123,184     $126,264     $127,021
over         over         over           over           over         over         over
$113,804     $115,739     $118,285       $120,887       $123,184     $126,264     $127,021     14.50%   14.50%    19.58%      19.58%          19.58%      19.58%     14.55%     15.88%    29%    29.00%




Marginal tax rate for dividends is a % of actual dividends received (not grossed-up amount).
                             Federal Basic Personal Amount                                                        Tax Rate
  2004         2005         2006           2007           2008         2009         2010        2004    2005 & 2007-2010               2006
  $8,012       $8,648       $9,039         $9,600         $9,600      $10,320      $10,382     16.00%        15.00%                 15.25%



 Source: Dayarayan centre of tax research
                                                                                                  87
The tax rate tables show the combined federal plus provincial/territorial marginal tax rate for 4 different types of income - the 2 types of
Canadian dividends, capital gains, and all other income. The other income column shows the actual tax rates for each tax bracket. A
person's marginal tax rate is the tax rate that will be applied to the next dollar earned.

The marginal tax rates on capital gains and Canadian dividend income are lower than on other types of income, because:

       only 50% of capital gains are included in taxable income
       Either 125% or 145% of Canadian dividends are included in taxable income, but a dividend tax credit is deducted from taxes
       payable. See the Dividend Tax Credit page for more information.

Other income includes income from employment, self-employment, interest from Canadian or foreign sources, foreign dividend income,
etc.

With some marginal tax rate tables, the marginal tax rate at $60,000 for dividends is the rate that would apply if there was no income
besides dividend income. This is not the way our tax rate tables work.

In our tables, the marginal tax rates for capital gains and dividends at any income level (say $60,000) are the marginal rates on the next
dollar of actual capital gains or actual dividend income, if the taxpayer has $60,000 of taxable income from sources other than dividends.

Example: the combined federal/BC marginal tax rate for a person earning $72,000 of employment income in 2009 would be

      32.5% for employment income
      16.25% for capital gains
      3.68% for eligible Canadian dividends
      18.71% for Canadian small business dividends



                                                                     88
Employee does not pay GST/HST on taxable benefits

The employee does not pay GST/HST you have to remit on taxable benefits. As explained in previous chapters, an amount for GST/HST
has already been added to the taxable benefit reported on the employee's T4 slip.

Example 1: Remitting GST/HST on automobile benefits in a non-participating province
As a corporation registered for GST/HST, you buy a vehicle that is used more than 50% in commercial activities and is made available
to your employee during 2009. The last establishment where the employee ordinarily reported in the year for the corporation was located
in Ontario.

You calculated a taxable benefit (including GST and PST) of $4,800 on the standby charge and an operating expense benefit of $600.
Your employee reimbursed you $1,800 for the automobile operating expenses within 45 days following the end of 2009. You did not
include this amount as a taxable benefit.

You claimed an ITC for the purchase of the automobile and also on the operating expenses. Since the benefit is taxable under the Income
Tax Act, and no situations described in the section Situations where we do not consider you to have collected GST/HST apply, you
calculate the GST remittance as follows:

Standby charge benefit
Taxable benefit reported on T4                                                                 $4,800
GST considered to have been collected on the benefit                                           $4,800     × 4/104 =          $184.62
Operating expense benefit
Taxable benefit reported on T4                                                                  $600
Employee's partial reimbursement of operating expenses                                         $1,800
Total value of the benefit                                                                     $2,400
GST considered to have been collected on the benefit                                           $2,400      × 3% =             $72.00
Total GST to be remitted on the automobile benefit                                                                           $256.62


                                                                  89
You are considered to have collected GST in the amount of $256.62 at the end of February 2010. You have to include this amount on
your GST/HST return for the reporting period that includes the last day of February 2010.

Example 2: Remitting GST/HST on automobile benefits in a participating province
Using the same facts as in Example 1, assume that the last establishment to which the employee ordinarily reported in the year for the
corporation was located in Nova Scotia. In this case, you would calculate the HST remittance as follows:

Standby charge benefit
Taxable benefit reported on T4                                                                 $4,800
HST considered to have been collected on the benefit                                           $4,800     × 12/112 =           $514.29
Operating expense benefit
Taxable benefit reported on T4                                                                  $600
Employee's partial reimbursement of operating expenses                                         $1,800
Total value of the benefit                                                                     $2,400
HST considered to have been collected on the benefit                                           $2,400       × 9% =             $216.00
Total HST to be remitted on the automobile benefit                                                                             $730.29

You are considered to have collected HST in the amount of $730.29 at the end of February 2010. You have to include this amount on
your GST/HST return for the reporting period that includes the last day of February 2010.



Example 3: Long service award
You bought a watch for $560 (including GST/HST and PST) for your employee to mark the employee's 25 years of service. You
reported a taxable benefit of $560 in box 14 and under code 40 on the employee's T4 slip.

You could not claim an ITC because you bought the watch for the employee's exclusive personal use and enjoyment. Since you cannot
claim an ITC, you are not considered to have collected GST/HST and, as a result, you will not have to remit GST/HST on the benefit.

                                                                   90
Example 4: Special clothing
You provided your employee with safety footwear designed to protect him or her from particular hazards associated with his or her
employment. Since we do not consider the footwear to be a taxable benefit to the employee for income tax purposes, you are not
considered to have collected GST/HST on the footwear and you do not have to remit GST/HST. However, you can claim an ITC for
any GST/HST you paid on the footwear.




Benefits Chart
This chart indicates whether the taxable allowances and benefits discussed in this guide are subject to CPP and EI withholdings, and
shows which codes you should use to report them on the employee's T4 slip. The chart also indicates whether GST/HST has to be
included in the value of the taxable benefit for income tax purposes. Cash reimbursements and non-cash benefits are subject to
GST/HST, unless they are for exempt or zero-rated supplies. Cash allowances are not subject to GST/HST.

Taxable allowance or benefit                                                                             CPP EI Code GST/HST
                               Automobile and motor vehicle allowances                                   yes    yes   40        no
                      Automobile standby charge and operating expense benefits                           yes    no    34       yes
                                                                                                                              [Note 1]
                   Board and lodging, if cash earnings also paid in the pay period                       yes    yes   30
                                                                                                                              [Note 1]
                    Board and lodging, if no cash earnings paid in the pay period                        yes    no    30
                                    Cellular phone service – in cash                                     yes    yes   40       yes
                                   Cellular phone service – non-cash                                     yes    no    40       yes
                                     Child care expenses – in cash                                       yes    yes   40       yes
                                    Child care expenses – non-cash                                       yes    no    40       yes
                                                                     91
                                                                                   [Note 2]
               Counseling services – in cash                 yes    yes       40
                                                                                   [Note 2]
              Counseling services – non-cash                 yes     no       40
     Disability-related employment benefits – in cash        yes    yes       40    yes
    Disability-related employment benefits – non-cash        yes     no       40    yes
   Discounts on merchandise and commissions on sales         yes     no       40    yes
            Educational allowances for children              yes    yes       40     no
                Gifts and awards – in cash                   yes    yes       40     no
          Gifts and awards – non-cash/near-cash              yes     no       40    yes
Group term life insurance policies: Employer-paid premiums   yes     no       40     no
                                                                                   [Note 3]
          Housing, rent-free or low-rent – in cash           yes    yes       30
                                                                   [Note 4]        [Note 3]
         Housing, rent-free or low-rent – non-cash           yes              30
         Interest-free and low-interest loans [Note 5]       yes     no       36     no
            Internet service (at home) – in cash             yes    yes       40    yes
           Internet service (at home) – non-cash             yes     no       40    yes
               Meals – Overtime allowances                   yes    yes       40     no
                Meals – Overtime – in cash                   yes    yes       40    yes
               Meals – Overtime – non-cash                   yes     no       40    yes
                    Meals – Subsidized                       yes     no       30    yes
                                                                                   [Note 6]
                Medical expenses – in cash                   yes    yes       40
                                                                                   [Note 6]
               Medical expenses – non-cash                   yes     no       40
     Moving expenses and relocation benefits – in cash       yes    yes       40    yes
    Moving expenses and relocation benefits – non-cash       yes     no       40    yes

                                                92
                    Moving expenses – non accountable allowance over $650                           yes   yes   40     no
                          Municipal officer's expense allowance [Note 7]                            yes   no    40     no
                                        Parking – in cash                                           yes   yes   40    yes
                                       Parking – non-cash                                           yes   no    40    yes
       Power saws and tree trimmers – rental paid by employer for employee-owned tools              yes   yes   40    yes
Premiums under provincial hospitalization, medical care insurance, and certain federal government
                                                                                                    yes   yes   40     no
                                         plans – in cash
Premiums under provincial hospitalization, medical care insurance, and certain federal government
                                                                                                    yes   no    40     no
                                        plans – non-cash
                                                                                                                     [Note 8]
                            Professional membership dues – in cash                                  yes   yes   40
                                                                                                                     [Note 8]
                           Professional membership dues – non-cash                                  yes   no    40
                                 Recreational facilities – in cash                                  yes   yes   40    yes
                                Recreational facilities – non-cash                                  yes   no    40    yes
                         Recreational facilities – club membership dues                             yes   no    40    yes
                    Registered retirement savings plan (RRSP) contributions                         yes   yes   40     no
                                                                                                                     [Note 8]
                 Registered retirement savings plan (RRSP) administration fees                      yes   no    40
                                   Scholarships and bursaries                                       yes   yes   40     no
                                     Security options [Note 9]                                      yes   no    38     no
                                     Social events – in cash                                        yes   yes   40     no
                                    Social events – non-cash                                        yes   no    40    yes
              Spouse or common-law partner's travelling expenses – cash allowance                   yes   yes   40     no
                 Spouse or common-law partner's travelling expenses – non-cash                      yes   no    40    yes
                           Tax-Free Savings Account – contributions                                 yes   yes   40     no
                                                                 93
                                                                                                                                [Note 10]
                            Tax-Free Savings Account – administration fees                                  yes   no     40
                                             Tool allowance                                                 yes   yes    40       no
                                           Tool reimbursement                                               yes   yes    40       yes
                                         Transit passes – in cash                                           yes   yes    40       yes
                                        Transit passes – non-cash                                           yes   no     40       yes
                              Transportation to and from the job – in cash                                  yes   yes    40       yes
                             Transportation to and from the job – non-cash                                  yes   no     40       yes
                              Travel assistance in a prescribed zone [Note 11]                              yes   yes    32       yes
                  Travelling allowances to a part-time employee and other employees                         yes   yes    40       no
                                                                                                                                [Note 10]
                                          Tuition fees – in cash                                            yes   yes    40
                                                                                                                                [Note 10]
                                         Tuition fees – non-cash                                            yes   no     40
                                 Uniforms and special clothing – in cash                                    yes   yes    40       yes
                                Uniforms and special clothing – non-cash                                    yes   no     40       yes
               Wage-loss replacement or income maintenance non-group plan premiums                          yes   no     40       no
Notes
1
  The rent portion of the lodging benefit is subject to GST/HST if the dwelling is occupied for less than one month; the utility portion
  is subject to GST/HST unless municipality supplied.
2
  Certain counseling services are subject to GST/HST. If the services you pay are subject to GST/HST, include the GST/HST in the
  value of the benefit.
3
  The rent portion of the housing benefit is subject to GST/HST if the dwelling is occupied for less than one month; the utility portion
  is subject to GST/HST unless municipality supplied.
4
  If it is a non cash benefit, it is insurable if it is received by the employee in addition to cash earnings in a pay period. If no cash
  earnings are paid in the pay period, it is not insurable.
5
  Enter the home relocation loan deduction under code 37.
                                                                      94
6
     Some medical expenses are subject to GST/HST. For more information,.
7
     Enter the exempt amount under code 70.
8
     Certain fees are subject to GST/HST. If the fees you pay are subject to GST/HST, include it in the value of the benefit.
9
     Enter the amount of the security options deduction under code 39 or 41, as applicable.
10
     Certain fees are subject to GST/HST. If the fees you pay are subject to GST/HST, include it in the value of the benefit.
11
     Enter the amount of medical travel assistance under code 33.

     (Source: Employers' Guide Taxable Benefits and Allowances 2009)



                                                                Total average household expenditure by province


                                                                                       2007                        2008                          2007 to 2008
                                                                                                      $                                           % change
                                   Canada                                             69,950                      71,360                             2.0
                          Newfoundland and Labrador                                   55,010                      57,710                             4.9
                             Prince Edward Island                                     55,570                      58,710                             5.7
                                 Nova Scotia                                          59,990                      60,330                             0.6
                               New Brunswick                                          58,210                      58,440                             0.4
                                   Quebec                                             57,310                      60,480                             5.5
                                   Ontario                                            76,650                      77,310                             0.9
                                  Manitoba                                            63,300                      63,510                             0.3
                                Saskatchewan                                          63,940                      68,280                             6.8
                                   Alberta                                            85,910                      86,910                             1.2
                               British Columbia                                       72,620                      73,120                             0.7



                                         Average total expenditure and shares of spending of major categories for provinces, 2008


                                                    Average household spending        Food       Shelter      Clothing          Transportation          Personal taxes2
                                                                                                                                     1
                                                                $                                                   Shares of spending (%)
                 Canada                                      71,360                   10.4        19.9            4.0                13.6                    20.5


                                                                                      95
       Newfoundland and Labrador                           57,710                       11.7          16.5            4.7                 15.6                  18.0
          Prince Edward Island                             58,710                       11.5          19.0            3.6                 15.2                  16.2
              Nova Scotia                                  60,330                       11.3          18.6            3.7                 14.7                  17.9
            New Brunswick                                  58,440                       11.2          17.2            3.5                 17.0                  17.8
                Quebec                                     60,480                       12.2          18.5            3.9                 13.2                  20.5
                Ontario                                    77,310                       9.7           21.2            4.2                 13.1                  21.2
               Manitoba                                    63,510                       10.2          18.2            3.9                 14.3                  18.8
             Saskatchewan                                  68,280                       9.2           17.2            3.8                 16.0                  19.1
                Alberta                                    86,910                       8.9           19.0            3.8                 14.0                  21.9
            British Columbia                               73,120                       10.9          20.8            4.0                 13.8                  18.7

                                               1.Shares of spending represent the proportions of total average household spending.
                      2.Percentage of spending on personal taxes depends on provincial and federal income tax rates as well as household income distribution.




  HST in British Columbia
  On October 14,2009 , the British Columbia Ministry of Finance released HST notice .The HST is schedualed to come into effect on
  July 1,2010 subject to legislative approval.



Harmonized Sales Tax: Creating Jobs, Lowering Prices

   B.C. will have the lowest provincial personal income taxes in Canada for individuals earning up to $118,000.
   Since 2001, the B.C. Government has reduced taxes more than 120 times, benefiting both business and the people of British
    Columbia.
   For the majority of taxpayers, your B.C. Government has reduced provincial income taxes by at least 37 per cent and an additional
    325,000 people no longer pay any B.C. income tax.
        An individual earning $15,000 now pays $420 less in taxes;
        An individual earning $20,000 now pays $605 less in taxes;
        An individual earning $40,000 now pays $990 less in taxes;

                                                                                       96
         An individual earning $50,000 now pays $1,400 less in taxes;
         An individual earning $60,000 now pays $1,820 less in taxes;
         An individual earning $70,000 now pays $2,240 less in taxes.
   Your B.C. Government will increase the basic personal income tax credit by 17 per cent to $11,000 on January 1, 2010.
   Your B.C. Government increased the Low Income Climate Action tax credit to low-income families by 5 per cent on July 1, 2009.
    That means low-income families will be eligible for $105 per adult and $31.50 per child annually. This new benefit will put an
    additional $15 million a year back in the pockets of the families and individuals who need it most.
   Your B.C. Government will introduce a B.C. HST credit, paid quarterly with the GST and Low Income Climate Action tax credits
    to offset the impact of the HST on those with low incomes.
   In 2008, every B.C. resident received a $100 climate action dividend cheque to help British Columbians make smart choices to
    reduce their carbon footprint
   Introduced the Rental Assistance Program in 2006, providing rent payment assistance to more than 8,200 low-income, working
    families with children whose combined income is less than $35,000. The average monthly rental assistance provided to these
    families is about $350.
   The Shelter Aid for Elderly Renters (SAFER) program has been improved and expanded, with 15,700 seniors' households – that's
    3,700 more households than 2001 – receiving an annual rental subsidy of $1,800.
   Your B.C. Government has increased the home owner grant by $100 and eliminated the threshold for low-income seniors,
    veterans and persons with disabilities. Your B.C. Government is providing a Northern and Rural Homeowner benefit of up to
    $200 for homeowners in the area of the province outside the Capital Regional District, Greater Vancouver Regional District and
    Fraser Valley Regional District for the 2011 tax year.
   With the improvements your B.C. Government is making to the MSP Premium Assistance Program, those in the greatest financial
    need will actually come out ahead.
   For example, a senior couple with an income of $35,000 will see their annual premium cost fall by more than $200. A family of
    four earning $30,000 will see their annual costs reduced by more than $250. In total, approximately 180,000 British Columbians
    will see their premium costs reduced or eliminated.
   Healthy Kids Program provides $700 per child, per year for additional dental and eye care on top of MSP Premium Assistance.
   After Fair Pharmacy Care was introduced in 2003, 300,000 families received more support than they did in 2001; under this
    program, the vast majority of British Columbians now pay the same or less for their prescription drugs.
   Your B.C. Government provides a Child Care Subsidy Program to assist low- and middle-income families earning up to $38,000
    with the costs of child care.
                                                               97
    On average, a family receiving the child care subsidy would receive $5,400 per child over the course of a year.
    Your B.C. Government created a new, temporary property tax deferment program for those British Columbians experiencing
      serious financial difficulties due to current economic conditions.
    Your B.C. Government permanently removed the tolls on the Coquihalla Highway saving travelers time and money. A passenger
      vehicle making a round trip twice a month will save $480 a year, and a commercial truck making a round trip once a week will
      save $4,800 a year.
   (Source:http://www.gov.bc.ca/yourbc/tax_families/tf_taxpayers.html?src=/taxpayers/tf_taxpayers.html)

Sales taxes in British Columbia

PST
Currently, the Provincial Government of British Columbia collects a Social Service Tax as known as the Provincial Sales Tax (PST) of
7% on most of the goods and services. The main difference with the GST is its taxable base since the PST taxation is done disregarding
if the good or service is for final use or not (at the difference of the GST taxing only goods and services for final use.


Main tax exemptions
   unprocessed food
   restaurant
   fuel
   children sized clothes and footwear


Tax revenue
The PST revenue is estimated at 5.087 Billions for the 209/2010 exercise from which 2 Billions is directly paid by the business sector. It
represents ~13% of the BC government budget.
HST
The BC government has announced on July 23rd, 2009, its intention to replace, by July 1st, 2010, the PST by a Harmonized Sales Tax
(HST) combining the GST with a provincial tax following the same rule than the GST.
Rationale

                                                                    98
The PST being a retail tax, the business sector is subject to a 7% PST on most of its input, so it is put at a competitive disadvantage with
business of other jurisdiction not subject to such taxation. Transferring this tax to the consumer favour both the exportation, and
investment in productivity and according several study is a more efficient taxation. It could also disfavour the labour intensive service
industry (like hairdresser or hospitality services), where inputs are marginal.

PST versus HST revenue
While the PST revenue is estimated $5.083 billion, for the 2009/2010 exercise, the HST revenue could generate significantly more
revenue, $6 billions according to the projection below,
   Several source concurs to estimate the 5% GST revenue for British Columbia of ~$5 Billions (or a tax base at ~100 billion after the
   current GST exemption concerning the public sector), this revenue can be multiplied by 7%/5%, taking account the difference rate,
   between current GST and proposed additional 7%, to estimate the HST provincial revenue, the taxable base being the same.
This is not taking account the additional windfall of $1.6 Billion provided by the Federal Government, as a consequence of the HST
adoption, and collection cost saving estimated at $30 millions.

Mitigation measure
In order to be revenue neutral, the BC government could explore several avenues: The Memorandum agreed between the provincial and
the federal government, gives the former the flexibility to
    Adjust the tax rate (after a 2 years period, and currently fixed at 7%), according to the above projection, the tax base change could
       provide room for a decrease of the tax rate of more than 1 point, to keep revenue neutral.
    exempt some service and good in the limit it doesn't affect more than 5% of the tax base
The Memorandum seems to prefer the second path by suggesting exemption of Motive fuel, Children's Clothing and footwear, Children
car seats, Feminine hygiene and Books.
Beside it, and following the #rationale justifying the introduction of the HST, the BC government, following the example of the Ontario
government, could choose to reduce other tax, reputed inefficient in economic term like personal tax.

Critics
Rather than decrease the rate of the HST across the board, the government has chosen to favour some special interest group industries,
calling several comments



                                                                     99
General remark
One will note that all those discretionary exemption defeat one purpose of the HST, which is tax harmonization, with cost saving
achieved by red tape reduction.
The HST shift benefits mostly to the capital intensive industry which is mining and forestry in BC. The government having chosen to
exclude most of labor intensive service industry of HST tax relief, the tax shift appear to favor the rural BC interior over the urban area
riding, and the exemption on motive fuel could be a consequence of this choice. In other word, the tax shift could favor declining legacy
industry representing a declining share of the BC GDP.
However, the government has adopted the following policy on goods taxation:
     tax credit on demand elasticity non directly function of the family income, like heating fuel
     Provincial HST exemption on demand elasticity directly function of the family income, like children garments.


HST and Green agenda
In 2008, BC has introduced a Carbon tax. In the meantime it plane to exempt motive fuel of the 7% HST. However the soft
transportation mode like bike, bike part and service, currently exempted of PST will be subject to the 7% under the HST umbrella. This
lack of readability in the political agenda pursued by the government in regard of the climate action has been called "pretzel logic" by a
Province commentator.
Some could explain the reasoning as a way to avoid too many taxes for the motive fuel, already subject to the carbon tax, but then the
reasoning should also apply to heating fuel what the BC government is short to do.
Fuel Demand elasticity
it is known the demand elasticity, as a function of price, for motive fuel is very light, so there was a priori little incentive for a
government to renounce to the taxation on such item by means of across the board taxes exemption, restraining his ability to reduce
price, by means of tax reduction, on sector more sensible to pricing. Whether final price of motive fuel is an issue for economic
competitiveness, the provincial government had a way to mitigate the effect of the HST introduction by reducing the motor fuel tax
accordingly. Whether the final price is a social issue, the government can also act by a tax credit, leaving choice to consumer to either
use it to offset the tax effect, or eventually to shift to less dependable mode.

HST and Sport Agenda
In 2009/2010, the Government spend $70 million in the promotion of healthy living and sport, but the introduction of HST will translate
by a new taxation of 7% for numerous of sport activities:
    biking

                                                                    100
    fitness and gym club
   ski passes
What could largely conceal the effort of the ministry of healthy living and sport?

HST and Social issue
HST will affect the heating fuel (previously exempted by the PST), and government plane to provide a tax credit to mitigate the effect of
it.
other items, like children's clothes and footwear, currently exempted of PST will be not affected by the HST either, though that the
government could have choose to mitigate the HST effect by a tax credit like in the case of motive fuel, which could have been more
favourable to low income families which spend less on garment than rich families.

HST and Housing
Renting
Under the GST rule, rent are exempted, so they will be also under HST rule like it was under PST rule.
 Purchasing
Purchase of existing home are exempted of GST (and so will be of HST) while purchase of new home are subject to a GST rate reduced
of 36% if the purchase price is below $350 000 (paying effectively a tax rate of 3.2%). Under PST rule, purchase of new home is
exempted of tax. Under BC HST rule, up to $200000 of the provincial part of the HST could be refunded (making virtually tax free the
purchase of new home under $400 000).
Nevertheless realtors and home appraisals service will be subject to full HST, whereas they were only subject to GST. It could be
considered the change could have little effect on the market:
    Realtor fees are traditionally paid by the seller, and tax increase will only affect its potential benefit (that is assuming the cost of
      home is fixed by market).
    Cost of Appraisal service can be considered as negligible in a traditional home purchase.
HST effect on new home pricing is expected to be mitigated by suppression of the PST on the construction inputs.

Benefits for Home Buyers
New homes in B.C. are subject to the GST, and also carry an estimated two per cent embedded tax as a result of the PST paid on most
construction materials.Under the proposed Harmonized Sales Tax, new homes will be subject to the HST but the embedded PST will be
eliminated because builders will be able to recover the tax paid on materials through input tax credits. Used homes will
                                                                     101
not be subject to the HST. An essential part of the BC HST will be a tax rebate for new homes. A rebate of up to $20,000 will ensure that
purchasers of new homes up to $400,000 do not pay more tax due to harmonization than is currently embedded in the price of a new
home. New homes above $400,000 will be eligible for a $20,000 rebate. New home sales will be subject to the HST
Sales of used homes will not be subject to HST.

BC Property Tax
All property owners are taxed annually based on the assessed values as determined by the BC Assessment Authority. The BC
Assessment Authority produces annual property assessments based on the market value of the real estate as at July 1st in the previous
year. Property assessments are determined using standard real estate valuation approaches; direct comparison, cost and income
approaches. The BC Assessment Authority also determines the physical condition, reflecting any changes after the valuation date, and
the actual use(s) to apply the correct property tax classification(s) for each property as at October 31st in the previous year.
Property owners receive their annual property assessment notices in the first week of January. The property owner has until January 31st
to file an appeal with the Property Assessment Review Panel. There is no fee to file an appeal to the Property Assessment Review Panel.
A third party may also file an appeal against a property assessment notice.
The BC Harmonized Sales Tax in a Nutshell – A Quick Overview of the B.C. HST 12% Tax and How It Influences New Home Buyers
of Real Estate

        The Harmonized Sales Tax (also known as the new BC HST) is 12% tax applicable to most goods and services, including new
        homes, real estate, and property.

        The new B.C. HST 12% Tax is the combination of the Federal Goods and Services Tax (5% GST) and the Provincial Sales Tax
        (7% PST).

        Implementation of the BC Harmonized Sales Tax will take place on July 1, 2010.

        The BC HST is NOT a 12% real estate tax, but a provincial harmonized tax on most goods, services and consumer products
        including new homes.


                                                                   102
        Currently, new BC and Vancouver homes are subject to 5% GST (federal tax) in which first time homebuyers or investors can
        receive GST rebates. This 5% GST will be replaced with the higher 12% B.C. Harmonized Sales Tax (HST), a 7% difference in
        taxes on the total purchase price of a new British Columbia home or property.
        The B.C. HST program will give partial rebates for new BC homes priced up to $400,000. The government will give these
        homebuyers a partial five per cent BC HST rebate on the provincial tax side which makes any new B.C. home or Vancouver
        property $400,000 or less no more expensive than it is today.

        Homebuyers looking to buy new Vancouver property over $400,000 will receive a maximum BC HST rebate of $20,000, but
        will see the purchase price above that level subject to the extra five per cent tax rate system.

        The British Columbia Harmonized Sales Tax of 12% HST is also applicable to any costs and fees associated with your
        property/home purchase including legal/notary fees, commissions and other closing costs.

        The BC HST transition rules are unclear at this time. It is unknown whether new Vancouver home sales contracts written before
        July 1, 2010 but completed after the harmonized sales tax HST launch date will be subject to the current 5% GST only or the
        entire 12% HST new tax.
        The cost of new home ownership will increase significantly in British Columbia due to the new BC HST tax of 12%. Not only
        will your new home or real estate cost more up front, but the 12% HST harmonized sales tax is also applicable to such things
        like strata fees, residential heating fuel, commercial rents, smoke detectors, fire extinguishers, repairs, cable TV, internet,
        electricity, gas, renovations, painting and other professional services.


Some BC Real Estate HST Numbers and How It Affects You

Scenario 1: Based on a purchase price of $600,000 for a new BC or Vancouver home, the homebuyer would pay a total of $72,000 in BC
HST taxes (12% on $600,000). With the homebuyer HST rebate for purchases above $600,000, the homebuyer would receive the
$20,000, thus reducing their purchase cost to $52,000 in taxes for a total of $652,000. Currently, the 5% GST applicable to the same
home would cost only $30,000 (a difference of $22,000).
*This does not include the HST applicable to closing fees.
                                                                  103
Scenario 2: If a BC homebuyer wanted to purchase a new Vancouver home costing $800,000, the total 12% HST hit would be $96,000.
The partial HST rebate of $20,000 (maximum allowed) will reduce this to $76,000, making the final purchase price at $876,000 plus
property transfer taxes and other closing costs. Before July 1, 2010, a new home would be subject to only 5% GST which is $40,000 on
an $800,000 property. With the new BC harmonized sales tax, a BC homebuyer would pay $36,000 more for the same home after
implementation of the HST tax. *This also does not include the HST applicable to closing costs. (Source: http://www.vancouver-real-estate-
direct.com/HST/index.html)

The BC HST Rebate – Partial British Columbia Harmonized Sales Tax Rebate on New B.C. and Vancouver Housing and Real Estate

Although the BC government and Ministry of Finance indicates that there is currently the 5% GST applicable to new construction homes
and BC real estate for sale in addition to 2% PST that is embedded within the cost of new homes on construction materials (as
Vancouver and BC home builders can get the full PST rebate currently), the 12% HST or BC Harmonized Sales Tax is applicable to any
new housing. The BC government has stated that there will be a partial HST rebate available to homebuyers that are equal to 5% of the
purchase price up to a maximum BC HST rebate amount of $20,000 (twenty thousand dollars). As the Ministry of Finance indicates the
‗hidden‘ 2% PST tax on construction materials for new homes built in BC right now, they argument is that with the 5% HST rebate on
new homes in Vancouver/BC, homebuyers purchasing new property under $400,000 will be paying the same amount before and after
July 1, 2010. Essentially, the current 5% GST + 2% PST embedded into current Vancouver new homes is equal to the 12% HST – 5%
HST rebate on homes less than $400k purchased after July 1st. However, BC homebuyers looking to purchase new Vancouver property
over $400,000 will not be so lucky, as they will be taxed at a rate that is 7% higher than the current GST/PST system because of the flat
$20,000 HST rebate allowable by the government. The B.C. Ministry of Finance has indicated that about half of new BC and Vancouver
home construction is sold for more than $400,000. Therefore, half of new Vancouver homebuyers will not see a difference in their final
purchase cost after the 5% HST rebate is applied, while the other half of new home buyers will see a significant 7% increase in their
purchase price even with the $20,000 BC HST harmonized sales tax rebate. There is currently no form or indication of how the BC
harmonized sales tax rebate or HST rebate can be claimed at this time, but further information will be released next year.
 The new BC HST will apply to new home sales. However, purchasers of new
Homes will be able to claim a rebate equal to 5% of the purchase price up to a maximum of $20,000. The government‘s stated intent is
that new homes up to $400,000 will not be subject to any additional tax burden than under the current regime. It is estimated that there is
currently PST embedded in the cost of new homes equivalent to a 2% tax rate.
Used or resale homes will not be subject to the BC HST just as they are not subject to GST.


                                                                    104
                 Comparison PST & HST System for new Home
Current New
home Price before
                                  $350,000                      &450,000                        &600,000                        &750,000           &1,000,000
GST & PST (PST
System)

system                 PST System       HST System     PST System     HST System     PST System        HST System   PST System        HST System   PST System      HST System

New home price         &350,000         &343,000
                                                        $450,000       $441,000        $600,000         $588,000        $750,000       $735,000     $1,000,000       $980,000
before taxes1

     Embedded PST2     $7,000           &0               $9,000             $0         $12,000             $0           $15,000            $0        $20,000            $0

     GST (5%)          &17,500          &0               $22,500            $0         $30,000             $0           $37,500            $0        $50,000            $0

  Federal HST          &0               &17,150
                                                           $0           $22,050           $0            $29,400           $0           $36,750            $0          $49,000
(5%)

  Provincial HST       &0               &24,010
                                                           $0           $30,870           $0            $41,160           $0           $51,450            $0          $68,600
(7%)

  BC new               &0               &17,150
                                                           $0           $22,050           $0            $26,250           $0           $26,250            $0          $26,250
housing rebate

  Federal new          &6,300           &6,174
                                                           $0              $567           $0               $0             $0               $0             $0            $0
housing rebate

   Property            &5,000           &4,860
                                                         $7,000          $6,820        $10,000           $9,760         $13,000        $12,700       $18,000          $17,600
transfer tax

Total new home         &366,200         &365,696        $479,500       $478,123        $640,000         $642,070        $800,500       $809,650     $1,068,000      $1,088,950
cost including
taxes1                           -01%                  -0.3%                                   -0.3%                           1.1%                2.0%




1
    Assumes that pre-tax new home price under the HST decreases by the amount of embedded PST, and that after-tax new home price increases by full amount

of provincial HST. Market forces will impact the extent to which these occur.
2
    It is estimated that the embedded PST in new homes in BC is, on average, equal to about 2% of the price. The amount of PST embedded in a specific new home may be more or less than 2%.


                                                                                                                  105
Comparison table between important change in HST , GST and RST

Clothing and Footwear
                            GST-taxable before           RST-taxable before          Is there a change to the amount of tax payable under the
                              July 1, 2010                  July 1,2010                                        HST?
  Adult Clothing     5%                             8%                             No (remains 13%)
Children's Clothing 5%                              No RST                         No (remains 5%)
Shoe Repair Service 5%                              8%                             No (remains 13%)
Children's Footwear 5%                              No RST if $30 or less          No for footwear up to size 6 (remains 5%)
Tailoring Services   5%                             8%                             No (remains 13%)
  Dry Cleaning       5%                             No RST                         Yes (changes to 13%)
    Service


Electronics
                                        GST-taxable before          RST-taxable before         Is there a change to the amount of tax payable
                                          July 1, 2010                 July 1,2010                            under the HST?
              TVs                  5%                          8%                          No (remains 13%)
  DVD and Blu-ray Players and      5%                          8%                          No (remains 13%)
         Accessories
          MP3 Players              5%                          8%                          No (remains 13%)
   Cell Phones, Smart Phones       5%                          8%                          No (remains 13%)
       Cell phone service          5%                          8%                          No (remains 13%)
  CDs, DVDs and Blu-ray discs      5%                          8%                          No (remains 13%)
                                                                       106
Tobacco
                                        GST-taxable before          RST-taxable before        Is there a change to the amount of tax payable under
                                           July 1, 2010                July 1,2010                                   the HST?
  Cigarettes and Other Tobacco    5%                            No RST                        Yes (changes to 13%)
            Purchases
 Nicotine Replacement Products    5%                            No RST                        Yes (changes to 13%)




Food and Beverages
                                                   GST-taxable before          RST-taxable before   Is there a change to the amount of tax payable
                                                     July 1, 2010                 July 1,2010                      under the HST?
Basic Groceries (e.g., Dairy, Meat, Vegetables, No GST                   No RST                     No HST
               Canned goods)
       Snack Foods (e.g., Chips, Pop)         5%                         8%                         No (remains 13%)
Qualifying Prepared Food and Beverages Sold 5%                           No RST                     No (remains 5%)
              for $4.00 or Less
    Restaurant Meals for More than $4.00      5%                         8%                         No (remains 13%)
            Alcoholic Beverages               5%                         10-12%                     HST 13%[1]




                                                                         107
Banking and Investments
                                            GST-taxable before                         RST-taxable before                     Is there a change to the amount of tax payable under the
                                              July 1, 2010                                July 1,2010                                                   HST?
 Mortgage Interest               No GST                                         No RST                                    No HST
      Costs
  Most Financial                 No GST                                         No RST                                    No HST
    Services




Around the House
                                                     GST-taxable before July 1, 2010         RST-taxable before July 1,2010               Is there a change to the amount of tax payable under the HST?
            Cleaning Products                   5%                                      8%                                       No (remains 13%)

   Laundry Detergent, Fabric Softeners          5%                                      8%                                       No (remains 13%)

           Household Furniture                  5%                                      8%                                       No (remains 13%)

        Refrigerators and Freezers              5%                                      8%                                       No (remains 13%)

    Pre-packaged Computer Software              5%                                      8%                                       No (remains 13%)

     Books (including Audio Books)              5%                                      No RST                                   No (remains 5%)

               Newspapers                       5%                                      No RST                                   No (remains 5%)

      Magazines Purchased at Retail             5%                                      8%                                       No (remains 13%)

       Office Supplies, Stationary              5%                                      8%                                       No (remains 13%)

          Landscaping Materials                 5%                                      8%                                       No (remains 13%)
       Including Sod, Seeds, Plants

  Linens (e.g., Blankets, Towels, Sheets)       5%                                      8%                                       No (remains 13%)




                                                                                                      108
Home Services
                                                                         GST-taxable before RST-taxable before      Is there a change to the
                                                                           July 1, 2010        July 1,2010        amount of tax payable under
                                                                                                                           the HST?
                        Cable Television Services                        5%                 8%                   No (remains 13%)
                           Cell Phone Services                           5%                 8%                   No (remains 13%)
                            Municipal Water                              No GST             No RST               No HST
                     Home Maintenance Equipment                          5%                 8%                   No (remains 13%)
                          Home Phone Services                            5%                 8%                   No (remains 13%)
 Home Service Calls to Repair Free-Standing Appliances such as Stoves,   5%                 8%                   No (remains 13%)
           Refrigerators, Washers, Dryers, and Televisions
                            Home Insurance                               No GST             8%                   No (remains 8%)
         Electricity and Heating (e.g., Natural Gas/Oil for Home)        5%                 No RST               Yes (changes to 13%)
                        Internet Access Services                         5%                 No RST               Yes (changes to 13%)
Home Service Calls by Electrician/Plumber/Carpenter to Maintain or Repair 5%                No RST               Yes (changes to 13%)
     Furnace, Leaky Faucets, Bathtub, Toilet, Electrical Wiring, etc.
          Landscaping, Lawn-Care and Private Snow Removal                5%                 No RST               Yes (changes to 13%)




                                                                         109
Accommodation and Travel
                                                          GST-taxable before    RST-taxable before     Is there a change to the amount of tax
                                                             July 1, 2010          July 1,2010                payable under the HST?
           Luggage, Briefcases, Bags, etc.              5%                     8%                    No (remains 13%)
              Municipal Public Transit                  No GST                 No RST                No HST
                     GO Transit                         No GST                 No RST                No HST
Air travel originating in Ontario and terminating in the 5%                    No RST                No (remains 5%)
                         U.S.[2]
   Air travel originating in Ontario and terminating    No GST                 No RST                No HST
           outside of Canada and the U.S.[3]
 Rail, boat and bus travel originating in Ontario and   No GST                 No RST                No HST
            terminating outside of Canada
                    Hotel Rooms                         5%                     5%                    Yes (changes to 13%)
                        Taxis                           5%                     No RST                Yes (changes to 13%)
                    Camping Sites                       5%                     No RST                Yes (changes to 13%)
  Domestic Air, Rail and Bus Travel originating in      5%                     No RST                Yes (changes to 13%)
                      Ontario




                                                                         110
Around the House
                                                           GST-taxable before        RST-taxable before   Is there a change to the amount of tax payable under the
                                                             July 1, 2010               July 1,2010                                 HST?
                Cleaning Products                     5%                        8%                        No (remains 13%)
       Laundry Detergent, Fabric Softeners            5%                        8%                        No (remains 13%)
               Household Furniture                    5%                        8%                        No (remains 13%)
            Refrigerators and Freezers                5%                        8%                        No (remains 13%)
         Pre-packaged Computer Software               5%                        8%                        No (remains 13%)
          Books (including Audio Books)               5%                        No RST                    No (remains 5%)
                   Newspapers                         5%                        No RST                    No (remains 5%)
          Magazines Purchased at Retail               5%                        8%                        No (remains 13%)
            Office Supplies, Stationary               5%                        8%                        No (remains 13%)
              Landscaping Materials                   5%                        8%                        No (remains 13%)
           Including Sod, Seeds, Plants
      Linens (e.g., Blankets, Towels, Sheets)         5%                        8%                        No (remains 13%)
     Tents, Sleeping Bags, Camping Supplies           5%                        8%                        No (remains 13%)
                       Tools                          5%                        8%                        No (remains 13%)
                  Patio Furniture                     5%                        8%                        No (remains 13%)
 Barbeques, Lawnmowers, Snowblowers, Sprinklers       5%                        8%                        No (remains 13%)
 Toys (e.g., Puzzles, Games, Action Figures, Dolls,   5%                        8%                        No (remains 13%)
                      Playsets)
              Outdoor Play Equipment                  5%                        8%                        No (remains 13%)
         (e.g., Swing Set, Sandbox, Slides)
                 Crafting Supplies                    5%                        8%                        No (remains 13%)
  Building Materials (e.g., Lumber, Concrete Mix)     5%                        8%                        No (remains 13%)
       Magazines Purchased by Subscription            5%                        No RST                    Yes (changes to 13%)
                Home Renovations                      5%                        No RST                    Yes (changes to 13%)

                                                                                 111
Motorized Vehicles
                                   GST-taxable before        RST-taxable before    Is there a change to the amount of tax payable under
                                     July 1, 2010               July 1,2010                               the HST?
       Vehicle Parts          5%                        8%                        No (remains 13%)
 Short-Term Auto Rentals      5%                        8%                        No (remains 13%)
    Lease of a Vehicle        5%                        8%                        No (remains 13%)
Child Car Seats and Booster   5%                        No RST                    No (remains 5%)
           Seats
      Auto Insurance          No GST                    No RST                    No HST
 Labour Charges to Repair     5%                        8%                        No (remains 13%)
         Vehicle
        Oil Change            5%                        8%                        No (remains 13%)
           Tires              5%                        8%                        No (remains 13%)
      Window Repair           5%                        8%                        No (remains 13%)
 Purchase of Vehicle from     5%                        8%                        No (remains 13%)
          Dealer
           Boats              5%                        8%                        No (remains 13%)
       Snowmobiles            5%                        8%                        No (remains 13%)
   Recreational Vehicles      5%                        8%                        No (remains 13%)
 Private Resale of Vehicles   No GST                    8%                        Yes[4] (changes to 13%)
      Gasoline/Diesel         5%                        No RST                    Yes (changes to 13%)




                                                                   112
Health Products and Services
                                                 GST-taxable before         RST-taxable before       Is there a change to the amount of tax
                                                    July 1, 2010               July 1,2010                  payable under the HST?
            Audiologist Services               No GST                  No RST                    No HST if offered by a practitioner of the
                                                                                                 service.
            Chiropractor Services              No GST                  No RST                    No HST if offered by a practitioner of the
                                                                                                 service.
           Physiotherapist Services            No GST                  No RST                    No HST if offered by a practitioner of the
                                                                                                 service.
         Pharmacist Dispensing Fees            No GST                  No RST                    No HST
        Over-the-Counter Medications           5%                      8%                        No (remains 13%)
             Prescription Drugs                No GST                  No RST                    No HST
            Some Medical Devices               No GST                  No RST                    No HST
        Includes walkers, hearing aids
      Prescription glasses/contact lenses      No GST                  No RST                    No HST
         Feminine Hygiene Products             5%                      No RST                    No (remains 5%)
         Adult Incontinence Products           No GST                  No RST                    No HST
                   Diapers                     5%                      No RST                    No (remains 5%)
                  Cosmetics                    5%                      8%                        No (remains 13%)
Hair Care Products (e.g., Shampoo, Conditioner, 5%                     8%                        No (remains 13%)
              Styling Products)
  Dental Hygiene Products (e.g., Toothpaste,   5%                      8%                        No (remains 13%)
               Toothbrushes)
          Massage Therapy Services             5%                      No RST                    Yes (changes to 13%)
                  Vitamins                     5%                      No RST                    Yes (changes to 13%)

                                                                      113
Home Purchases
                           GST-taxable before July 1, 2010 RST-taxable before July 1,2010   Is there a change to the amount of tax payable under the HST?
New Homes up to $400,000 5%                                No RST                           No change[5]
New Homes over $400,000 5%                                 No RST                           Yes[5A]
      Resale Homes         No GST                          No RST                           No HST
 Real Estate Commissions   5%                              No RST                           Yes (changes to 13%)




Professional and Personal Services
                                                       GST-taxable before         RST-taxable before           Is there a change to the amount of tax
                                                          July 1, 2010               July 1,2010                      payable under the HST?
                Child Care Services                  No GST                      No RST                     No HST
                     Legal Aid                       No GST                      No RST                     No HST
   Coffins and Urns Purchased Separately from a      5%                          8%                         No (remains 13%)
            Package of Funeral Services
                  Fitness Trainer                    5%                          No RST                     Yes (changes to 13%)
                Hair Stylist/Barber                  5%                          No RST                     Yes (changes to 13%)
 Aesthetician Services (e.g. Manicures, Pedicures,   5%                          No RST                     Yes (changes to 13%)
                     Facials)
                 Funeral Services                    5%                          No RST                     Yes (changes to 13%)
                     Legal Fees                      5%                          No RST                     Yes (changes to 13%)


                                                                           114
Memberships, Entertainment and Sports Equipment
                                                  GST-taxable before         RST-taxable before      Is there a change to the amount of tax payable
                                                     July 1, 2010               July 1,2010                         under the HST?
Admissions to Professional Sporting Events 5%                           10%                       Combined rate going down to 13% from current
                                                                                                  15%
              Movie Tickets                  5%                         10%                       Combined rate going down to 13% from current
                                                                                                  15%
             Music Lessons                   No GST                     No RST                    No HST
          Skis and Snowboards                5%                         8%                        No (remains 13%)
           Hockey Equipment                  5%                         8%                        No (remains 13%)
               Golf Clubs                    5%                         8%                        No (remains 13%)
           Green Fees for Golf               5%                         No RST                    Yes (changes to 13%)
   Gym and Athletic Membership Fees          5%                         No RST                    Yes (changes to 13%)
Ballet, Karaté, Trampoline, Hockey, Soccer 5%                           No RST                    Yes[6] (changes to 13%)
                Lessons, etc.
Tickets for Live Theatre with 3,200 Seats or 5%                         No RST                    Yes[7] (changes to 13%)
                   Less


Leases and Rentals
                                     GST-taxable before            RST-taxable before        Is there a change to the amount of tax payable under
                                       July 1, 2010                   July 1,2010                                   the HST?
        Condo Fees               No GST[8]                     No RST[8]                    No HST[8]
      Residential Rents          No GST                        No RST                       No HST
Hockey Rink and Hall Rental 5%                                 No RST                       Yes (changes to 13%)
          Fees
                                                                           115
Footnotes:
[1] Although sales tax on alcohol is decreasing, other alcohol fees and taxes are changing to continue to support social responsibility.

[2] Includes air travel terminating in the French islands of St. Pierre and Miquelon but does not include air travel terminating in Hawaii.

[3] Includes air travel terminating in Hawaii but does not include air travel terminating in the French islands of St. Pierre and Miquelon.

[4] HST does not apply; however, Ontario will maintain the RST on private transfers of used vehicles at a rate of 13 per cent to help ensure a level-playing field
between sales by dealerships and private sales.

[5] The new housing rebate will be 75 per cent of the Ontario component of the HST, up to a maximum of $24,000. The rebate will ensure that buyers of homes
priced up to $400,000 will, on average, pay no more tax than under the RST system. However, applicable RST on building supplies is embedded in the price of
the home.

[5A] New homes purchased as primary residences, valued at $400,000 or more will be eligible for the maximum new housing rebate of $24,000.

[6] HST taxable, although some could be HST-exempt if provided by a public service body to children 14 and under and underprivileged individuals with a
disability.

[7] HST taxable, although some could be exempt if maximum admission charged by a public service body is $1 or less, if the admissions are made in the course
of the fundraising events where charitable receipts for income tax purposes may be issued, or admissions are to amateur performances.

[8] Residential condo fees charged to residents are exempt; however, purchases by condominium corporations will be subject to HST, if applicable.




                                                                                116
                                                                       What's Taxable under the HST and What's Not in British Columbia?1

                                     AROUND THE HOUSE                                                              GST-taxable              PST-taxable              Is there a change to the
                                                                                                                     before                   before                amount of tax payable the
                                                                                                                                                                               HST?
                                                                                                                     July, 2010              July 1,2010

                                     Cleaning Products                                                                    5%                      7%                        No (remains 12%)

                                     Laundry Detergent, Fabric Softeners                                                  5%                      7%                        No (remains 12%)

                                     Household Furniture                                                                  5%                      7%                        No (remains 12%)

                                     Household Appliances (Refrigerators, Stoves, Washers,                                5%                      7%                        No (remains 12%)
                                     Dryers,Freezers,Dishwashers)

                                                                                                                                                      2
                                     Pre-packaged Computer Software                                                       5%                      7%                        No (remains 12%)

                                     Books (Including Audio Books)                                                        5%                    No PST                      No (remains 5%)

                                     Newspapers                                                                           5%                    No PST                 Yes (changes to 12%)

                                     Certain School Supplies                                                              5%                    No PST                 Yes (changes to 12%)

                                     Magazines                                                                            5%                    No PST                 Yes (changes to 12%)

                                     Office Supplies and Stationery                                                       5%                      7%                        No (remains 12%)

                                     Landscaping Material (Sod, Topsoil, Rockery)                                         5%                      7%                        No (remains 12%)

                                     Linens (e.g., Blankets, Towels, Sheets)                                              5%                      7%                        No (remains 12%)

                                     Tens, Sleeping Bags, Camping Equipment                                               5%                      7%                        No (remains 12%)

                                     Tools                                                                                5%                      7%                        No (remains 12%)

                                     Patio Furniture                                                                      5%                      7%                        No (remains 12%)

                                     Rugs and Mats                                                                        5%                      7%                        No (remains 12%)


1
 - Assumes sales by GST/HST registrants that are not non-profit organization or registered charities, unless otherwise specified.
2
  - The Energy Star exemption for residential refrigerators, freezers and clothes washers ended on March 31, 2010. All major household appliances are now subject to PST.
                                                                                                                    117
                                    Works of Art, Vases, and Carvings                              5%     7%          No (remains 12%)

                                    Sewing Machines                                                5%     7%          No (remains 12%)

                                    Vacuum Cleaners                                                5%     7%          No (remains 12%)

                                    Barbeques, Lawnmowers, Snow Blowers, Sprinklers                5%     7%          No (remains 12%)

                                    Toys (e.g., Puzzles, Games, Action Figures, Dolls,             5%     7%          No (remains 12%)
                                    Playsets)

                                    Outdoor Play Equipment (e.g., Swing Sets, Sandboxes,           5%     7%          No (remains 12%)
                                    Slides)

                                    Arts and Craft Supplies (e.g., Glue, Paper, etc)               5%     7%           No (remains 12%

                                    Building Materials (e.g., Lumber, Concrete Mix, Nails)         5%     7%           No (remains 12%

                                                                                                                 3
                                    Energy Star Windows                                            5%   No PST       Yes (changes to 12%)

                                    Thermal Insulation, Weather Stripping and Caulking             5%   NoPST        Yes (changes to 12%)

                                    Exterior and Interior Paint                                    5%     7%          No (remains 12%)

                                    Kitchen Utensils                                               5%     7%          No (remains 12%)

                                    Cookware                                                       5%     7%          No (remains 12%)

                                    First Aid Kits                                                 5%   No PST       Yes (changes to 12%)

                                    Smoke Detectors Valued less Than $2502 for Residential         5%   No PST       Yes (changes to 12%)
                                    Use

                                    Other Smoke Detectors                                          5%     7%          No (remains 12%)

                                    Household Pets (Including Pet Food)                            5%     7%          No (remains 12%)

                                    House Plants, Cut Flowers, and Outdoor Ornamental              5%     7%          No (remains 12%)
                                    Plants




3
    - Exemption was scheduled to expire April 2011.
                                                                                             118
                                       Food Producing Plants and Trees (e.g., Tomato Plants,         5%        No PST        Yes (changes to 12%)
                                       Plum Tree)

                                       Household Moving Services                                     5%        No PST        Yes (changes to 12%)




                                       CLOTHING, FOOTWEAR AND ACCESSORIES                      GST-taxable   PST-taxable    Is there a change to the
                                                                                                 before        before      amount of tax payable the
                                                                                                                                     HST?
                                                                                                July, 2010   July 1,2010

                                       Adult Clothing and Footwear                                   5%          7%             No (remains 12%)


                                       Children Sized Clothing and Footwear                          5%        No PST           No (remains 5%)


                                       Adult Sized Clothing for Children                             5%        No PST         Yes (changes to 12%)


                                       Children's Cloth Diapers                                      5%        No PST           No (remains 5%)4


                                       Children's Disposable Diapers                                 5%          7%             Yes (drops to 5%)5


                                       Shoe Repair                                                   5%        No PST         Yes (changes to 12%)


                                       Tailoring Services                                            5%        No PST         Yes (changes to 12%)


                                       Dry Cleaning                                                  5%        No PST         Yes (changes to 12%)


                                       Formal Wear Rentals                                           5%          7%             No (remains 12%)


                                       Used Adult Clothing Purchased for Less Than $100              5%        No PST         Yes (changes to 12%)6



4
    - For Further detail see http://www.cra-arc.gc.ca/E/pub/gi/gi-063-e.pdf.
5
    - For Further detail see http://www.cra-arc.gc.ca/E/pub/gi/gi-063-e.pdf.
6
    - All sales used or donated goods mode by a registered charity are exempt from HST.
                                                                                               119
                                        Watches                                                                              5%                       7%                       No (remains 12%)


                                        Jeweler                                                                              5%                       7%                       No (remains 12%)


                                        Handbags and Purses                                                                  5%                       7%                       No (remains 12%)


                                        Backpacks                                                                            5%                       7%                       No (remains 12%)


                                        Shoe Insoles and Laces                                                               5%                       7%                       No (remains 12%)


                                        Sunglasses (Non-prescription)                                                        5%                       7%                       No (remains 12%)


                                        Scarves                                                                              5%                       7%                       No (remains 12%)


                                        Umbrellas                                                                            5%                       7%                       No (remains 12%)


                                        Belts                                                                                5%                       7%                       No (remains 12%)


                                        FOOD AND BEVERAGES                                                             GST-taxable              PST-taxable              Is there a change to the
                                                                                                                           before                   before             amount of tax payable the
                                                                                                                                                                                     HST?
                                                                                                                        July, 2010               July 1,2010

                                        Basic Groceries (e.g., Dairy, Meat, Vegetables, Canned Goods)                     No GST                    No PST                          No HST


                                        Snack Foods (e.g., Chips, Pop)                                                       5%                     No PST                   Yes (changes to 12%)


                                        Restaurant Meals                                                                     5%                     No PST                   Yes (changes to 12%)


                                        Alcoholic Beverages                                                                  5%                       10%                     Yes (drops to 12%)7


                                        Catering and Event Planning Services                                                 5%                    No PST8                  Yes (changes to 12%)9




7
    - Although the provincial sales tax rate on liquor is decreasing from 10% to 7% liquor mark-ups are adjusted with the implementation of the HST to generally keep the Liquor Distribution Branch shelf prices constant..
8
    - PST applies if the caterer provides a taxable service (e.g., setting up and taking down temporary gazebos, tents, and dance floors) or taxable goods that the customer keeps (e.g., flowers or decorations).
9
    - Catering provided by a registered charity is exempt from HST.
                                                                                                                       120
                                        (e.g., planning, consulting, coordinating and organizing)




                                       HOME SERVESES                                                                  GST-taxable   PST-taxable before        Is there a change to the
                                                                                                                        before                               amount of tax payable the
                                                                                                                                        July 1,2010                     HST?
                                                                                                                       July, 2010

                                       Basic Cable Television                                                               5%             No PST               Yes (changes to 12%)

                                       Additional or Specialty Cable Television or Satellite Television                     5%               7%                   No (remains 12%)

                                       Cell Phone                                                                           5%               7%                   No (remains 12%)

                                       Municipal Water                                                                   No GST            No PST                       No HST

                                       Home Maintenance Equipment (e.g., Lawn Mowers, Mops)                                 5%               7%                   No (remains 12%)

                                       Local Residential Phone                                                              5%             No PST               Yes (changes to 12%)

                                       Long Distance Telephone Services                                                     5%               7%                   No (remains 12%)

                                       Repair to Certain Household Appliances (e.g., Stoves, Ovens,                         5%             No PST               Yes (changes to 12%)
                                       Refrigerators, Washers, and Dryers)

                                       Repair to Household Electronics (e.g., Televisions and Stereo                        5%               7%                   No (remains 12%)
                                       Equipment)

                                       Home Insurance                                                                    No GST            No PST                       No HST

                                       Residential Electricity and Heating (e.g., Natural Gas/Oil)                          5%      No PST, but subject to   Yes (drops to 5%, from 5.4%,
                                                                                                                                    0.4% ICE10 Fund levy     after a 7% provincial rebate)11

                                       Internet Access                                                                      5%               7%                   No (remains 12%)

                                       Repair Maintenance or Renovation Services for Real Property (e.g.,                   5%             No PST               Yes (changes to 12%)
                                       Plumbing Electrical Wiring)




10
     - Innovative Clean Energy
11
     - Provincial administered Residential Energy Rebate applies to provincial portion of HST and ICE Fund levy is eliminated.
                                                                                                                      121
                                        Landscaping Lawn-Care, Private Snow Removal and House                          5%        No PST          Yes (changes to 12%)
                                        Cleaning

                                        Computer Hardware Repair Services (e.g., adding or repairing circuit           5%          7%              No (remains 12%)
                                        boards or other components

                                        Computer Software Repair Services (e.g., virus removal or software             5%        No PST          Yes (changes to 12%)
                                        installation)




                                         ACCOMMODATION AND TRAVEL                                                GST-taxable   PST-taxable    Is there a change to the
                                                                                                                   before        before      amount of tax payable the
                                                                                                                                                        HST?
                                                                                                                  July, 2010   July 1,2010

                                         Luggage                                                                       5%          7%             No (remains 12%)

                                         Municipal Public Transit                                                  No GST        No PST                No HST

                                         Hotel Rooms                                                                   5%          8%            Yes (drops to 12%)12

                                         Taxis                                                                         5%        No PST         Yes (changes to 12%)

                                         Camping Sites                                                                 5%        No PST         Yes (changes to 12%)

                                         British Columbia Ferry System                                             No GST        No PST                No HST

                                         Domestic Air, Rail and Bus Travel Originating in British Columbia             5%        No PST         Yes (changes to 12%)


                                         International Air Travel to Continental United States originating in          5%        No PST           No (remains 5%)
                                         British Columbia (Other Than Day Trips)




12
     - In certain municipalities there is an additional local hotel room tax of up to 2% for tourism marketing
                                                                                                                 122
                                        Internationa Air Travel Other Than to Continental United States                    No GST                    No PST                          No HST
                                        originating British Columbia


                                        International Rail, Bus or Ship Travel originating in British                      No GST                    No PST                          No HST
                                        Columbia (Other Than Day Trips)




                                        MOTORIZED VEHICLES                                                             GST-taxable               PST-taxable             Is there a change to the
                                                                                                                         before                    before               amount of tax payable the
                                                                                                                                                                                   HST?
                                                                                                                         July, 2010              July 1,2010

                                        Short Term Auto Rentals                                                               5%              7% Plus $ 1.50 per          Yes (rate remains at 12% but
                                                                                                                                               day Passenger              $1.50 per day tax eliminated
                                                                                                                                              Vehicle Rental Tax

                                        Lease of a Vehicle Other Than an Alternative Fuel Vehicle of Fuel                     5%                   7% to 10%               Depends on previous PST
                                        Efficient Vehicle                                                                                                              treatment (remains 12% or drops
                                                                                                                                                                                    to 12%)

                                        Lease of Alternative Fuel Vehicle and Fuel Efficien Vehicle                           5%              7% to 10% (Subject           Depends on previous PST
                                                                                                                                             to a PST reduction) 13    treatment (remains 12% or drops
                                                                                                                                                                                    to 12%)


                                        Purchase of Vehicle Other Than an Alternative Fuel Vehicle or                         5%                   7% to 10%               Depends on previous P5T
                                        Fuel Efficient Vehicle                                                                                                         treatment (remains 12% or drops
                                                                                                                                                                                    to 12%)


                                        Purchase of an Alternative Fuel Vehicle and Fuel Efficient Vehicle                    5%                7% to 10%               Depends on previous PST
                                                                                                                                               (subject to a            treatment (remains 12% of
                                                                                                                                              PST reduction)                  drops to 12%)

                                        Child Car Seats and Booster. Seats                                                    5%                     No PST                     No (remains 5%)14




13
     - Please note that purchases and leases of some new alternative fuel vehicles or new fuel efficient vehicles are subject to a partial reduction in the PST payable. For more information on the amounts of this PST reduction and who
        qualifies, please see Bulletin SST085 Alternative Fuel Vehicles and Fuel Efficient Vehicles, located on the Ministry of Finance's website at http://www.cra-arc.gc.ca/E/pub/gi/gi-063/gi-063-e.pdf.
14
     - For further detail, refer to http://www.cra-arc.gc.ca/E/pub/gi/gi/063-e.pdf.
                                                                                                                        123
                                        Auto Insurance                                                                     No GST                   No PST                            No HST

                                        Vehicle Parts                                                                         5%                       7%                      No (remains 12%)

                                        Vehicle Repair Services                                                               5%                       7%                      No (remains 12%)

                                        Gil Changes                                                                           5%                       7%                      No (remains 12%)

                                        Tires                                                                                 5%                       7%                      No (remains 12%)

                                        Automotive Window Repair                                                              5%                       7%                      No (remains 12%)


                                        Purchase of Used Vehicle from a Non-                                                  5%                   7% to 10%               Depends on previous PST
                                        GST Registrant (e.g., car dealer)                                                                                              treatment (remains 12% or drops
                                                                                                                                                                                    to 12%)


                                        Purchase of Used vehicle from-ali^ff-GST Registrant (e.g., Private                 No GST                  7% to 10%              No HST (12% provincial tax
                                        seller)                                                                                                                                       applies) 15


                                        Purchase of Boats and Non-Turbin Aricraft from a Non-GST                           No GST                      7%                 No HST (12% provincial tax
                                        Registrant (e.g., Private Seller)                                                                                                              applies)

                                        Boats and Non-Turbine Aircraft                                                        5%                       7%                      No (remains 12%)

                                        Gasoline/Diesel                                                                       5%                    No PST                     No (remains 5%)16

                                        VehideOil, Grease, Lubricants antifreeze                                              5%                       7%                      No (remains 12%)

                                        Outboard Motors                                                                       5%                       7%                      No (remains 12%)

                                        Motor Vehicle Parking                                                                 5%                    No PST                   Yes (changes to 12%)




15
     - HST does not apply. However, British Columbia's 12% tax on private sales of boots, aircraft and vehicles will apply to provide comparable treatment to sales by dealerships.
16
     - In For further detail, refer to http://www.cra-arc.gc.ca/E/Pub/gi/gi/061-e.pdf.
                                                                                                                        124
                                     HOME PURCHASES                                                                 GST-taxable              PST-taxable              Is there a change to the
                                                                                                                        before                   before             amount of tax payable the
                                                                                                                                                                                  HST?
                                                                                                                     July, 2010               July 1,2010

                                     Niew Homes up to $525,000                                                            5%                     No PST                       No change"17
                                     New Homes over $525,000                                                              5%                     No PST                            Yes18
                                     Previously Occupied Homes                                                         No GST                    No PST                          No HST
                                     Legal fees                                                                           5%                       7%                       No (remains 12%)
                                     Real Estate Commissions                                                              5%                     No PST                  Yes (changes to 12%)




                                     HEALTH AND BEAUTY                                                              GST-taxable              PST-taxable              Is there a change to the
                                                                                                                        before                   before             amount of tax payable the
                                                                                                                                                                                  HST?
                                                                                                                     July, 2010               July 1,2010

                                     Health Care Services Offered by a Medical Practitioner (e.g.,                     No GST                    No PST                          No HST
                                                                      19
                                     Medical and Dental Services)


                                     Audiologist Services Offered by a practitioner of the Service                     No GST                    No P5T                          No HST


                                     Chiropractic Services Offered by a practitioner of the Service                    No GST                    No PST                          No HST


                                     Physiotherapy Services Offered by a practitioner of the Service                   No GST                    No PST                          No HST


                                     Massage Therapy Services                                                             5%                     No PST                  Yes (changes to 12%)


                                     Pharmacist Dispensing Fees                                                        No GST                    No PST                          No HST


                                     Over-the-Counter Medications                                                         5%                     No PST                  Yes (changes to 12%)



17
   - BC will provide a rebate of 71.43% of the provincial portion of the HST, to a maximum of $26,250, for new housing purchased as a primary residence. The rebate ensures that, on average, purchasers will pay no more provincial tax due
      to harmonization-that is, the will pay no more in provincial HST than is currently embedded as PST in the price of a new home. It is estimated that the embedded PST in new homes in BC is, on overage, equal to about 2% of the price.
18
   - Purchasers of eligible new homes over $, are eligible for a rebate of $26,250
19
   - Other than for cosmetic purposes.
                                                                                                                    125
                                          Prescription Drugs                                                   No GST    No PST         No HST


                                          Some Medical Devices Including Walkers, Hearing Aids                 No GST    No PST         No HST


                                          Prescription Glasses and Contact Lenses                              No GST    No PST         No HST


                                          Feminine Hygiene Products                                                 5%   No PST    No (remains 5%)20


                                          Adult Incontinence Products                                          No GST    No PST         No HST


                                          Cosmetics                                                                 5%    7%        No (remain5l2%)


                                          Hair Care Products (e.g., Shampoo, Conditioner, Styling Products)         5%    7%       No (remains 12%)


                                          Dental Hygiene Products (e.g.. Toothpaste, Toothbrushes, Floss)           5%    7%       No (remains 12%)


                                          Vitamins                                                                  5%   No PST   Yes (changes to 12%)


                                          Pill Boxes                                                                5%    7%       No (remains 12%)


                                          Sow Dryers                                                                5%    7%       No (remains 12%)


                                          Curling Irons                                                             5%    7%       No (remains 12%)


                                          Deodorants and Deodorrizers                                               5%    7%       No (remains 12%)


                                          Nail Care Products (e.g. Nail Polish, Nail Files)                         5%    7%       No (remains 12%)


                                          Perfume                                                                   5%    7%       No (remains 12%)


                                          Shaving Supplies (e.g., Razors, Shaving Cream)                            5%    7%       No (remains 12%)


                                          Tanning Lotion                                                            5%    7%       No (remains 12%)




20
     - For further detail, refer to http://www.cra-arc.gc.ca/E/Pub/gi/gi/061-e.pdf.
                                                                                                              126
    MEMBERSHIPS, ENTERTAINMENT AND SPORTS                          GST-taxable   PST-taxable    Is there a change to the
                           EQUIPMENT                                 before        before      amount of tax payable the
                                                                                                         HST?
                                                                    July, 2010   July 1,2010


Admission to Professional Sporting Events (e.g. Hockey, Football         5%        No PST         Yes (changes to 12%)
and Soccer Games)



Movie Tickets                                                            5%        NO P5T         Yes (changes to 12%)


MUSIC Lessons                                                        No GST        No PST               No HST


Music Instruments                                                        5%          7%             No (remains 12%)


Skis and Snowboards                                                      5%          7%             No (remains 12%)


Hockey Equipment                                                         5%          7%             No (remains 12%)


Steles (e.g., Hockey, Figure, Inline)                                    5%          7%             No (remains 12%)


Safety Helmets for Sports (e.g., Hockey Helmets, Snowboard               5%        No PST         Yes (changes to 12%)
Helmets, Bike Helmets)


6o!r Clubs                                                               5%          7%             No (remains 12%)


Golf Memberships                                                         5%        No PST         Yes (changes to 12%)


Driving Range Fees                                                       5%        No PST         Yes (changes to 12%)


Gym and Athletic Memberships                                             5%        No PST         Yes (changes to 12%)




                                                                   127
                                        Ballet, Karate, Trampoline. Hockey. Soccer Lessons etc.                             5%                    No PST                  Yes21 (changes to 12%)


                                        Tickets for Live Theatre                                                            5%                    No PST                  Yes22 (changes to 12%)


                                        Swim Fins and Swimming Goggles                                                      5%                       7%                      No (remains 12%)


                                        Bicycles                                                                            5%                    No PST                   Yes (changes to 12%)


                                        Bicycle Accessories Purchased Separately                                            5%                       7%                      No (remains 12%)


                                        Admission to Museums and Art Galleries                                              5%                    No PST                   Yes (changes to 12%)


                                        Music Concerts                                                                      5%                    No PST                   Yes (changes to 12%)


                                        Sports Equipment (e.g., Footballs, Soccer Ball, Baseball Bats, Free                 5%                       7%                      No (remains 12%)
                                        Standing Gymnastics Equipment)


                                        Ski Lift Passes                                                                     5%                    No PST                   Yes (changes to 12%)


                                        Adult Sized Ski Gloves                                                              5%                       7%                      No (remains 12%)


                                        Adult Sized Ski Gloves for Children                                                 5%                    No PST                   Yes (changes to 12%)


                                        Children's Sized Ski Gloves                                                         5%                    No PST                      No (remains 5%)


                                        Ski Goggles                                                                         5%                       7%                      No (remains 12%)


                                        Adult Sized Ski Boots                                                               5%                       7%                      No (remains 12%)


                                        Adult Sized Ski Boots for Children                                                  5%                    No PST                   Yes (changes to 12%)


                                        Children's Sized Ski Boots                                                          5%                    No PST                   Yes (changes to 12%)




21
     - These items are subject to HST, although some could be exempt from HST if provided by a public service boody to children 14 and under and underprivileged individuals with a disability.
22
     - Subject to HST, although some could be exempt if the maximum admission charged by a public service body to children 14 and under and underprivileged individuals with a disability.
                                                                                                                      128
                                        LEASSE AND RENTALS                                                            GST-taxable              PST-taxable     Is there a change to the
                                                                                                                          before                   before     amount of tax payable the
                                                                                                                                                                        HST?
                                                                                                                        July, 2010              July 1,2010

                                        Condo Fees                                                                        No GST                   No PST             NO HST23


                                        Long-Term Residential Accommodation                                               No GST                   No PST              No HST


                                        Hockey Rink and Hall Rentals                                                         5%                    No PST        Yes (Changes to 12%)


                                        Equipment Rentals (e.g., Carpet cleaners, power washers)                             5%                          7%        No (remains 12%)




                                        ELECTRONICS                                                                   GST-taxable              PST-taxable     Is there a change to the
                                                                                                                          before                   before     amount of tax payable the
                                                                                                                                                                        HST?
                                                                                                                        July, 2010              July 1,2010


                                        Televisions                                                                          5%                          7%        No (remains 12%)


                                        DVD and Blu-ray Players and Accessories                                              5%                          7%        No (remains 12%)


                                        Digital Cameras and Camcorders                                                       5%                          7%        No (remains 12%)


                                        Cell Phones and Smart Phones                                                         5%                          7%        No (remains 12%)


                                        CDs, DVDs, and Blu-ray Discs                                                         5%                          7%        No (remains 12%)


                                        MP3 Players                                                                          5%                          7%        No (remains 12%)




23
     - Residential condo association fees to residents are exempt; however, purchase by condominium corporation will be subject to HST, if applicable.
                                                                                                                       129
Music or Video MP3s Downloaded Electronically                           5%   No PST   Yes (changes to 12%)


Video Game Consoles                                                     5%    7%       No (remains 12%)


Video Games                                                             5%    7%       No (remains 12%)


GPS Systems                                                             5%    7%       No (remains 12%)


Laptops                                                                 5%    7%       No (remains 12%)


Desk Top Computers                                                      5%    7%       No (remains 12%)


Printers and Fax Machines                                               5%    7%       No (remains 12%)


Stereos and Speakers                                                    5%    7%       No (remains 12%)


Cables, Wires, and Connector                                            5%    7%       No (remains 12%)


Projector Screens                                                       5%    7%       No (remains 12%)


Headphones                                                              5%    7%       No (remains 12%)


Marine Electronics (e.g., Marine Radios, GPS Systems, Speakers)         5%    7%       No (remains 12%)




                                                                  130
PROFESSIONAL AND PERSONAL SERVICES                            GST-taxable   PST-taxable    Is there a change to the
                                                                before        before      amount of tax payable the
                                                                                                    HST?
                                                               July, 2010   July 1,2010


Child Care Services                                             No GST        No PST               No HST


Legal Aid                                                       No GST        No PST               No HST


Funeral Services                                                    5%        No PST         Yes (changes to 12%)


Coffins and Urns Purchased from Funeral Services                    5%          7%             No (remains 12%)


Fitness Trainer                                                     5%        No PST         Yes (changes to 12%)


Hair Stylist/Barber                                                 5%        No PST         Yes (changes to 12%)


Aesthetician Services (e.g., Manicures, Pedicures, Facials)         5%        No PST         Yes (changes to 12%)


Legal Services                                                      5%          7%             No (remains 12%)


Accounting Services                                                 5%        No PST         Yes (changes to 12%)


Interior Design Services                                            5%        No PST         Yes (changes to 12%)


Wedding Planning Services                                           5%        No PST         Yes (changes to 12%)


Veterinarian Services                                               5%        No PST         Yes (changes to 12%)


Professional Printed Photographs                                    5%          7%             No (remains 12%)


Furniture, Automotive and Marine Re-upholstery                      5%          7%             No (remains 12%)



                                                              131
                     TOBACCO                                      GST-taxable   PST-taxable    Is there a change to the
                                                                    before        before      amount of tax payable the
                                                                                                        HST?
                                                                   July, 2010   July 1,2010

                     Cigarettes                                         5%        No PST         Yes (changes to 12%)


                     Cigars                                             5%        No PST         Yes (changes to 12%)


                     Chewing Tobacco                                    5%        No PST         Yes (changes to 12%)


                     Nicotine Replacement Products                      5%        No PST         Yes (changes to 12%)




                     BANKING AND INVESTMENTS                      GST-taxable   PST-taxable    Is there a change to the
                                                                    before        before      amount of tax payable the
                                                                                                        HST?
                                                                   July, 2010   July 1,2010

                     Mortgage Interest Costs                        No GST        No PST               No HST


                     Most Financial Services                        No GST        No PST               No HST




GOODS subject to BC Harmonized Sales Tax

Energy conservation equipment (e.g., insulation, solar power equipment), bicycles, schools supplies (although books will be exempt),
smoke detectors and fire extinguishers, work related safety equipment basic cable TV and residential phones, non-prescription
                                                                  132
medication, vitamins and dietary supplements, residential flues (electricity, natural gas) and heating, all food products (only basic
groceries will remain exempt from BC HST), safety helmets, life jackets, first aid kits, magazines and newspapers.




Partial British Columbia Harmonized Sales Tax Rebate on New B.C. and Vancouver Housing and Real Estate

                                                                                           Purchase Price
     Price of Eligible      GST Portion –
                                              BC Portion – New                        (not including property
        New Home            New Housing                             Total Rebates                                 New Home Cost Increase
                                              Housing Rebate2                           transfer tax & other
(not including GST/HST)       Rebate1
                                                                                            closing fees)
        $350,000                $6,300             $17,500             $23,800                $368,200                      $0
        $400,000                $3,150             $20,000             $23,150                $424,850                      $0
        $600,000                  $0               $20,000             $20,000                $652,000                    $22,000
        $800,000                  $0               $20,000             $20,000                $876,000                    $36,000
       $1,000,000                 $0               $20,000             $20,000               $1,100,000                   $50,000
1
  New British Columbia and Vancouver home buyers may be eligible for the federal GST Rebate
(Called the GST new housing rebate), which generally equals 36% of the total GST tax paid on the first $350,000 of the purchase price
of a new home. The amount of the federal GST rebate is phased out on a straight-line basis for new BC and Vancouver homes priced
between $350,000 and less than $450,000.
2
  British Columbia proposed Harmonized Sales Tax rebate (or BC HST rebate) for new housing is equal to 5% of the purchase price up
to a maximum rebate of $20,000.

Wondering What Goods and Services are Subject to the New BC HST?
As with any transition between taxes, there is much confusion among the public and consumers as to the new laws and guidelines. Such
is the case with the implementation of the B.C. Harmonized Sales Tax or BC HST of 12%, what goods and services are subject to this
new tax? And what products that were charged provincial sales tax or PST of 7% will be charged at 12% HST now? Basically speaking,
the B.C. Harmonized Sales Tax is the harmonization or combination of the 2 taxes that British Columbians pay currently. However,
some goods and services are subject only to PST and some only to GST while others are subject to both taxes. For the new BC HST,


                                                                     133
everything will be taxed at 12%. Here is a list of BC goods and services that used to be only charged 7% PST, and will now be subject to
the entire harmonized sales tax of twelve per cent.

SERVICES subject to the new B.C. HST
Airline fares within Canada, Funeral services, Real estate fees, Membership fees for health clubs, dry cleaning, personal services such as
hair care, Movie and theatre tickets, Professional services such as accounting and home care, Repair services for household appliances,
and Household maintenance such as renovations and painting.

GOODS and SERVICES that will actually cost LESS!
Liquor at restaurants will actually end up costing less with the integration of the 12% HST in British Columbia. Currently, there is a 15%
tax on liquor in BC restaurants (that‘s 5% GST and 10% liquor tax). This 15% liquor tax will be replaced with the 12% harmonized sales
tax, reducing the taxes by 3%.

GOODS and SERVICES that is exempt from the B.C. Harmonized Sales Tax of 12%
These include fuel including gas, diesel and bio-fuel in addition to low income families who will receive HST refund cheques quarterly
to compensate for the 12% HST. The HST refund cheques to low income families is in addition to the federal GST refund cheques as
well as the BC carbon tax credit cheques that they currently receive. Also, children‘s items including books, clothing, footwear, car seats,
booster seats, diapers and feminine hygiene products are exempt from the 12% BC HST tax.

Benefits for Small and Medium-Sized Businesses
Lower cost of doing business:
The proposed Harmonized Sales Tax (HST) will reduce costs for B.C.‘s small and medium sized businesses by eliminating the PST on
business costs, generating about $2 billion dollars in savings from all businesses that can be passed on to consumers.
Currently, businesses pay PST on most of their ―inputs‖ that go into producing or selling their products and services. For example, tax is
paid on office equipment, supplies and furniture, telecommunications equipment and services,
Vehicles and energy to heat and light their buildings and power their equipment
Under the proposed HST, all B.C. businesses will no longer pay tax on these input costs resulting in savings of $1.9 billion
For example, a restaurant wills no longer pay sales tax (PST) on products which are considered business ―inputs‖
Under HST such as:


                                                                    134
 fridges, stoves, freezers, dishwashers and other appliances
 energy for heat, cooking and operating equipment and lighting
 cleaning supplies, such as rags, soaps and cleaning solutions,
 cash registers, computer hardware and software
 equipment repair and maintenance services
 paper towel and toilet paper
 customer food bills and menus
 cloth napkins, table cloths, tray covers and placemats
 pots, pans, kitchen implements and knives
 plates, bowls, glasses, cups, other reusable dishes, and cutlery
 coffee machines, blenders, mixers and other small appliances
 free-standing equipment such as juice dispensers, ice machines and coolers
 office equipment, supplies and furniture
 advertising materials, such as flyers and brochures
 items purchased to give away as free promotions
 These savings will reduce business costs, attract investment, create jobs and according to studies on the implementation of HST in
 eastern Canada, result in lower prices for consumers.




References
  1. BC budget 2010
  http://www.bcbudget.gov.bc.ca/2010/highlights/2010_Highlights.pdf

  2. BC Budget 2009 http://www.bcbudget.gov.bc.ca/2009/estimates/2009_Estimates.pdf
  3. http://www.fin.gov.bc.ca/Fed_Prov_MOU_english_July23.pdf
  4. Taxation and Economic Efficiency: Results from a Canadian CGE Model, par Maximilian Baylor et Louis Beauséjour, Canadian
     federal Finance Minister 2004
                                                                 135
 5. Vaughn Palmer Ambitious reforms by Liberal governments to be eclipsed by HST, Vancouver Sun, July 28th, 2009
 6. from [[2][Public account of Canada]], stating at $29.9 billions the 5% GST revenue for whole Canada for the exercise 2007/2008,
    and considering the contributively part of the British Columbia is of 15.4% in 2003 according to
    http://www.parl.gc.ca/information/library/PRBpubs/prb0610-e.htm, , 29.9*(15.7%)= $4.6Billions not including the BC GDP
    growth
 7. http://www2.news.gov.bc.ca/news_releases_2009-2013/2009PREM0017-000141.htm
 8. Taxation and Economic Efficiency: Results from a Canadian CGE Model, par Maximilian Baylor et Louis Beauséjour, Canadian
    federal Finance Minister 2004
 9. http://www.fraserinstitute.org/Commerce.Web/product_files/JulAug06ffTaxCuts.pdf
 10.http://www.vancouversun.com/business/good+business+business+should+tell/1872582/story.html
 11.http://www.theprovince.com/news/Revenue+neutral+levy+could+pull+200m/1864766/story.html
 12.http://www.strategicthoughts.com/record2009/HSTbase.html
 13.Alberta Budget Eliminates Health-Care Premiums
 14.Canada Revenue Agency
 14. http://www.vancouver-real-estate-direct.com/HST/index.html)
 15. http://vancouver.ca/aboutvan.htm
 16. OECD, 2005 data
 17-Deloitte country guide Canada tax
 18-KPMG Canada tax
 19-http://www.Taxtips.ca
 20- https://hst.blog.gov.bc.ca/wp-content/uploads/2010/05/GST_PST_HST_List_v04.pdf




DMC
Dayarayan Management & Consulting LTD
                                                               136
 is a Canadian company which provides full company services including company registration, management, and financial services. With
our head quarter in Vancouver, we can even provide Canadian bank account opening and other confidential services which protect our
clients.
Our Services:
   Worldwide Companies Registration
   Bank Account Opening
   Annual Renewal, Accounting and Auditing etc
   HK Company: Services include Annual Return, Accounting and internal Auditing,
   Tax return, Change of Shareholder(s) or Director(s), Company Suspension or Termination, etc.
   Investment Consulting
   Management Consultancy
   Company formation(IBC , BVI)
   Management of offshore entities
   Tax Advice - Canada & International
   Representation, Nominee & Trustee Services
   Company Secretarial & Legal Services
   Administration & Professional Services
   Banking Support Services
   Accounting Services

CONTACT US:Dayarayan Management & CONSULTING (LTD)
112 West. 12th.Street North Vancouver V7M 1N3
Vancouver. British Columbia. Canada
Tel: 1604-9833704      Fax: 16049601216 Cell: 17788295504
Website: www.dayarayan.ca
Email: info@dayarayan.com & dayarayan@gmail.com




                                                                137
Dayarayan publication in English:
1- Canada Taxation 2010
2- Canada Taxation 2009
3- Doing business in Iran
4- Canada Tax Guide 2008
5- World Economy Index 2007


Dayarayan Publication in Farsi:
        ‫1- راهنمای مالیاتی کانادا(بریتیش‬
                      2008 ‫کلمبیا) - سال‬
         ‫2-راهنمای مالیاتی کانادا(بریتیش‬
                     2009       -)‫کلمبیا‬
   -‫کانادا‬       ‫3-بررسی امجالی نظام مالیاتی‬
                                        2009
                       2009-‫4-مهاجرت به کاناد‬
           ‫5-منافع مالیات مهاهنگ فروش‬




                            138
Find US:
1. www.dayarayan.net
2. www.dayarayan.ca
3. www.dayarayan.info
4. icaew.com/index.cfm/route/156616/icaew_ga/en/Library/...
5. dayarayanmanagementconsultingltd.blogspot.com
6. www.estandardsforum.org/iran/.../international-standards-on-auditing
7. www.docstoc.com/docs/11040469/tax-guide-in-Canada
8. dayarayanmanagementconsultingltd.blogspot.com/.../canada-tax-
   revenue.html
9. www.iadvisory.gov.sg/upload/Doing_Business_in_Iran.pdf
10. http://www.taxtips.ca/busdir/businessconsulting/bc.htm
11.http://tarazaccounting.blogspot.com/
12.www.worldwide-tax.com/iran/iran_tax.asp
13.http://dayarayanias.blogfa.com/
14.http://dayarayanmanagementconsultingltd.blogspot.com/2010/03/hst-in-
   british-colunmbia-2010.html
15.http://dayarayanvancouver.blogspot.com/2009/11/bc-property-tax.html
16.www.linkedin.com/pub/dayarayan-auditing-dayarayan/4/a5a/782
17.finance.groups.yahoo.com/group/Daya-accountants
18. iadvisory.gov.sg/upload/Establishing_a_Joint_Stock_Compan
19.ifac.org/PAIB/relevant_links.php?sort=title&...+Standards
20.totallytax.com/.../Middle_East_Tax_Advisers
21.www.prweb.com/releases/2006/05/prweb383409.htm
22.http://www.iacpa.ir/tabid/160/articleType/ArticleView/articleId/333/Do
   nig-Business-in-Iran.aspx
23.cnv.org/c/DATA/2/19/2010 BUSINESS LICENCES ISSUED – ALPHA
24.http://www.cnv.org/c/DATA/2/19/2010%20BUSINESS%20LICENCES%20ISS
   UED%20-%20ALPHABETICAL.PDF
25.www.doingbusiness.org/LocalPartners/SearchResults.aspx?economy
   id=91




                                   139

				
DOCUMENT INFO
Shared By:
Tags:
Stats:
views:210
posted:6/26/2010
language:English
pages:139